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J&M Management Consulting www.jnm.com30.09.2008

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At a Glance: Global Mold Managementat Continental AG

Advanced processing based on SAP best practices

Dr. Ing. Dirk Petermann,Head of Competence Center Supply Chain & Logistics,Continental AG


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30.09.2008 J&M Management Consulting www.jnm.com Page 2

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Benefits and Look Ahead

Lessons Learned

Solutions for Process Efficiency

Characteristics of Global Mold Management1

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Lessons Learned



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What are the challenges for a global acting tiremanufacturers mold management system?

Worldwide operational availability of mold components among different operative

systems must be guaranteed

Today molds cannot be provided for all plants all over the world anymore

Over the years a heterogeneous IT-system landscape has been established,

which determines a complex process structure with a significant number of

individual steps

Molds and their components can have different assembly status and locations

A central mold master list must specify, which components can be assembled to

produce a distinct tire

Integrated handling of mold related applications should be possible to reduce

redundancy, avoid interfaces and increase process safety...

Source: Scoping Workshop with Continental Mold Management TiresDepartment


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What are the challenges for a global acting tiremanufacturers mold management system?

Main Characteristics of Mold Management:

1.Cross-System

StockVisibillity

2.Global

Transfer

3.Sophisticated

Data Model


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What is the challenge when a proprietary softwaresolution is changed to SAP ERP?

Custom made functionality:

Business requirements covered by existing host system

Screen-layout designed to individual needs

Continuous extension and improvement of developments over the years(workflows etc.)

Sophisticated support of communication to external parties (e.g. multipletransfer of tire drawings and specification changes to vendors)

Management of Change:

Current way of working has been engraved in subliminal behavior of people

People and culture have to be addressed to engage the organization for thenew way of working

Compulsory MIS functions have to be established immediately by SAP bestpractice processes and some essential system customizing

Master data clean up is critical for an efficient migration but relevantresources are not available sufficiently prior to system go-live


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It takes several steps to release an individually developedsystem by means of a standard software

CustomizationStandard SW

MIS

host

system

100 %

S

ystemf

unctionality/coverage

ofbusinessrequirements

2007

Kobalt

Fertigung

klassisch

Customizing,

SystemEnhancements,

Reporting

SAPBest-Practice

for Automotive

Accepted,

temporary Gap

2008

Customizing,System

Enhancements,

Reporting

SAP

Best-Practice

for Automotive

Future

Potential

2010

Missing Function

/ Integration


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Enabler ValueKPI

Costs

Revenue

Level of integration with

procurement and tire

production processes

Future degree of integration

with shopfloor systems

No. of interfacesWorldwide operationalavailability of molds

Physical stock aligned

with digital inventory data

Stock Visibility across all

plants

Sophisticated Data Model

Integrated process

handling in existing tire

SAP ERP system

Unique organisational

concept across all plants

Reconciliation costs

Time between production

requirement and provision of

mold

Annual spending for system

support

The Enabler-KPI-Value Network illustrates value andfuture benefits of a software substitution

Inventory accuracy /

compliance

Hardware costs (host system)


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Enabled by SAPTechnology

Identified enablers must be implemented, valid performance indicatorsestablished and values covered by the future system solution

Global Mold Management at Continental, enabled by SAP Technology

Mold

ManagementSystem


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Lessons Learned



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SAP NetWeaver BISAP NetWeaver BI

Worldwide operational availability among 3 operativesystems must be guaranteed

1. Cross-System Stock Visibility

SAP R/3Europe

and South Africa

SAP R/3Europe

and South Africa

SAP R/3Asian Pacific

SAP R/3Asian Pacific

SAP R/3America

SAP R/3America


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Today mold(parts) cannot be provided for all plants allover the world anymore

2. Global Transfer

Worldwide tire production

Significant acquisition costs for assets

Increasing capital commitment by numerous repeat molds

Unified production technology world wide allows to use

molds across the globe

Building blocks system for mold assembly allows totransfer complete molds as well as single parts

Changes in product allocation and customer demands

require quick and efficient mold transfer process in high

frequency

Molds are stored for actual production only

High frequency of mold transfers must be handled


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America

Europe

The established system landscape determines a complex processstructure with a significant number of individual steps

Sending PlantPurchasing Plant

Expand PurchaseRequisition

Convert PurchaseRequisition intoPurchase Order

Create PurchaseRequisition

Create Sales Document

Central ServiceDepartment

Receive OrderAcknowledgment

Receive

Shipping notification

Create Goods Movement

/ GR Posting

Process Goods Issue /

Create Invoice

2. Global Transfer

High degree ofProcessAutomation

implemented


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Mold(parts) can have different assembly statusand locations

3. Sophisticated Data Model

TreadRing

Sidewall Bottom

Sidewall Top

Bead Ring Bottom

Bead Ring Top

Conceptual design of the overall data model includes SAP objects:

Material Master, Equipment, Installed Base, Serial Number

Single, unmountedMold

Component

in storage location in transit

Mounted mold,assembled in a container

in storage location in production

in transit

Mold components, stored

in a box

in storage location

in transit


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The Mold Master List specifies, which components canbe assembled to produce a distinct tire

3. Sophisticated Data Model

LPN

Container Insert

BR Profile Type

Mold Type

Design Number

MultipleSpecifications

1000005Speed SymbolSide Plate BottomSB

Load IndexMold Part TopMT

1000099

1000004

1000003

1000002

1000001

Physical Equipment

Trademark

Product Name

Size

Article Number

Tire Attributes

Container G40

Mold Part Bottom

Side Plate Top

Bead Ring Bottom

Bead Ring Top

Tread Ring

Description

Container

MB

ST

BB

BT

TR

MML Equipment700100

Tire Article

Mold Master List

Assembled Mold


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Lessons Learned



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First impressions of the implementation project showpotentials for improvement

Organizational learning:

Some organizational functions and

processes are merely driven by

reporting requirements

Some departments work rather

person driven than task driven

Processes are usually triggered in

push-mode

Vendor selection process is unclear

System Experience:

Certain business functions with no

efficient system support which show

potential for optimization have beenidentified

Some key players with intimate

system know-how had huge

influence on original design

Current processes and

organizational set-up was closely

designed to former application logic

During realization stage several work packages with potential for improvement have been

identified.

During realization stage several work packages with potential for improvement have been

identified.


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Global TireSourcing (Mold

Demand Planning)

Tire & mold design

Set-up of production

process

Documentation

Drawings

Specifications

Maintenance

Definition of quality

regulations

Plant requirements

Eurovents

Rubbering

Container

requirements

Simplification of organizational set-up with small redesigneffort possible

Capacity planning

Mold requirements

identification

Allocation of molds

Release / modification

planning of used molds

Stock visibility

R&D planning

Investment planning

Stock ownership

Potential roles and responsibilities of future mold management processes

Mold Design &Engineering

Strategic MoldProcurement

Operational MoldProcurement

Plant MoldEngineering

Vendor evaluation

Vendor selection

Vendor development

Price negotiations

Definition of central

conventions for

operational procurement

Approval of service level

agreements

Invoice verification

Communication with

vendors

Disposition

Exception

management

Local requirements

Customs

management

Documentation

Detailed stock visibility

Press-dependent

specifications

Budget-, capacity-

and material

requirements

planning

Production planning and

monitoring

Goods receipt / goods

issue

Quality control

Removal / Putaway

Plant maintenance

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Lessons Learned



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Follow-up Functions

Integration with existing LESsystem

Expansion of implemented

workflow logic

Implementation of preventive

maintenance

Advanced integration of

production systems

Integrated handling reduces redundancy, avoidsinterfaces and increases process safety...

Benefits

All mold-related processes canbe handled in one single software

Full integration of purchasing and

cross plant transfer processes

(inside and cross regional)

Integration of Asset Accounting,Investment Management and

Controlling

Unique data base and search

functionality for all applications

Avoidance of manual input viacontinuous process automation

and cross system integration

Future safety via standard

software application

Benefits and look ahead on further system developments


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Passionate about creating sustainable value

J&M Management Consulting AGWilly-Brandt-Platz 568161 Mannheim

www.jnm.com

Thank you for your attention

Continental AGVahrenwalder Str. 930165 Hannover

www.continental-corporation.com

Arriving safely and comfortably

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