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Integrated Production Planning

with SAP APO PP/DS at Bayer AG

S u c c e s s S t o r y

Bayer MaterialScience AG is a core business

of the Bayer Group and holds a leading position

in the world market for important chemical

products. A supply chain management solution

now allows the company to schedule pro-

duction levels centrally and to react quickly

to changes.
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All Information in Real Time
SAP APO at Bayer MaterialScience
Rapid Reactions
in Chemical Plants
It’s impossible to think about daily life without
polyether foams. They provide modern comfort in
seat upholstery and mattresses. They form the foot
bed in shoes and the inner linings of textiles.
As a packaging material, they protect, as carpet
cushions, they absorb sound. They’re also used
in industry and medicine. As they fulfil numerous
requirements, polyether foams can be manufactured
in various versions, densities, and structures.
Bayer MaterialScience produces hundreds of
product variants, or PET formulations, in both of
its polyether facilities in Dormagen am Rhein,
Germany. The production procedures are
complicated and the processing capacities are
finite. Lengthy delivery times must be taken into
account for raw and base materials. These materials
are stored in tanks and warehouses until needed
and their use in the various production steps –
blending, weighing, purifying, and intermediate
storage – might not occur directly after each other.
Ultimately, they are made ready for shipment as
blends and trading units i.e. end products that
reflect customer desires.
Bayer MaterialScience
Bayer MaterialScience AG, formerly Bayer
Polymers, employs about 23,000 worldwide at
120 locations. Revenues reached € 10.8 million
in 2002. Bayer MaterialScience has core
competencies in product groups for rubber,
synthetics, lacquer, adhesives and polyurethane;
it counts among the world’s most important
polymer manufacturers. Its primary customers
include the automobile industry, construction
industry, electrical & electronic companies,
manufacturers of sporting goods & leisure
articles, plus companies supplying packaging
and products for medical technology.
J&M Management Consulting I Success Story
Scheduling and production processes must be just
as adjustable as polyether foam is versatile. Bayer
MaterialScience in Dormagen schedules and
controls its manufacturing processes with SAP
Advanced Planning & Optimization, using modules
Production Planning and Detailed Scheduling (SAP
APO–PP/DS). The PP/DS scheduling capability in
SAP APO is an element of mySAP Supply Chain
Management. At Bayer MaterialScience the
application improves planning processes con-
siderably. Networking with the central SAP R/3
solution it now enables integrated scheduling
through all production levels and significantly
increases the company’s ability to react to the
unexpected. It also lowers the number of costly
empty periods and quantities of semi-finished /
intermediate inventory.
Replacing Legacy Systems
Bayer MaterialScience originally set up two local
scheduling systems in addition to SAP R/3. Firstly
an application from JD Edwards (then called
Numetrix) monitored the manufacture of the basic
polyether product. Secondly a proprietary, host-
based scheduling application, for the use of boilers,
handled production planning for the various
formulations. However, these systems only partially
worked together. Data had to be manually
maintained to transfer information on material
scheduling, production, warehouse movements
and inventory from SAP R/3 into the detailed
scheduling system for the production processes.
With the implementation of SAP APO–PP/DS,
Bayer MaterialScience looked to its Supply Chain
Management (SCM) strategy and set major
concrete goals for the project:
Creation of integrated, multilevel production
planning in one system and in real-time
collaboration with SAP R/3.
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Complete integration of the strategic plan for
sales and operational planning plus, in particular,
enablement of forecast-based, market-oriented
production.
Replacement of the previous insular solution
and simultaneous improvement of the new IT
solution to gain detailed information in fewer
operational steps.
Bayer MaterialScience engaged J&M Management
Consulting to implement SAP APO–PP/DS. The
challenge was to integrate sales planning, order
processing, and production in terms of both
processes and IT. The first step consciously
abstained from a completely automated solution
so that the application would remain manageable
and to foster its acceptance. A comprehensive
planning board enabled schedulers to follow all
the information relevant to real-time scheduling
and to intervene in planning when necessary.
Coupled Sales &
Order Processing
The following steps proved essential to the success-
ful implementation of SAP APO–PP/DS at Bayer
MaterialScience:
1st Step: Implementation of a comprehensive, alert-
based, and interactive scheduling system which
took into account integration and transparency.
2nd Step: Automation of manual, repetitive
scheduling while looking for solutions to relieve
planners from routine tasks.
3rd Step: Usage of optimization procedures during
production planning and improved them
according to defined metrics such as the reduction
of setup time.
No attempt was made to realize complex algorithms
right at the start. Dealing with automation in a later
phase has its advantages:
The planning processes can be improved
continuously, additional implementations require
less effort and achieves higher ROI.
Implementation in steps helps users understand
the solution before the system schedules
independently in the background (black box
syndrome).
Users themselves learn to demand and accept
automatic processes.
The implementation now enables planners to
promptly react to requirements from sales and to
directly schedule production adjustments from one
source. Special alerts immediately inform those
responsible for planning of changes in production
requirements. These include deviations, changes
and unplanned events that always occur in practice.
The production planning board clearly indicates
the need for action in real time and immediately
displays the changes relevant to production that
are triggered by the alerts. It thus supports
modifications to the production plan.
Deviations Analyse
Changes Initiate
Unplanned Events Alert
New Conditions Situation
Planning
Fig.1 Production Planning Process
J&M Management Consulting I Success Story
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Contact
Lars Eickmann, Partner
J&M Management Consulting
Kaiserringforum
Willy-Brandt-Platz 5
D-68161 Mannheim
Tel +49 621 124769 0
Fax +49 621 124769 20
E-Mail l.eickmann@jnm.com
www.jnm.com

Production Flow on the Rolling Forecast

Planning Board SAP APO – DP

Monthly Sales Numbers

The implemented design is based on replicating
the actual processes for the components, the Intermediate Rough Production
Planning SAP APO – SNP
preliminary semi-finished products and the finished
products. This includes fulfilment of committed MTF Requirements Checked for Capacity

customer orders (make-to-order) and production

Production Planning and Monitoring
for servicing anticipated future orders (make-to- SAP APO – PP/DS
forecast). Phased production monitoring in SAP Planning and Production
APO–'96PP/DS has several distinct advantages. Customer Orders Processing
Orders
Status Delivery

One of these is that the planning board automatically

Order
displays all phases of production. It also enables Processing SAP
Production Shipping
SAP PP-PI SAP SD
tracing of quality controls and the ability to run SD
production at full capacity due to the knowledge
that the processes are being monitored effectively. Fig.2 Planning Process with Customer Order Management
Furthermore, the company can make better use of
the container resources (termed as primarily tanks
where chemical reactions occur) which are used
to store the substances. This improvement helps
with the challenge of efficiently scheduling tanker
trucks, particularly with respect to reducing the
time that they sit idle.

Now that the planning tools have been successfully

implemented in the pilot plants, the company is
developing a business case study that looks at
rolling out the solution at other plants within Bayer
MaterialScience. Despite the complex scope of
operations in Dormagen, the implementation
resulted in good insights that can be realized in
additional rollouts leading to even shorter implemen-
tation times and higher ROI in the future.