1. Sales & Operations Planning for Project-driven Industries, Case Study Krones AG May 25th, 2011 Hans-Georg Kaltenbrunner

2. Copyright 2011 JDA Software Group, Inc. Agenda Einleitung JDA Lösungs-Portfolio Übersicht Case Study Krones AG: –Warum JDA? –Herausforderungen im Anlagen- und Maschinenbau –SCM Ansatz für projektbezogenes Auftragsmanagement –Implementierte Lösungen und deren Integration in SAP –Projektansatz und Lessons learned Zusammenfassung Q&A – Diskussion

3. Copyright 2011 JDA Software Group, Inc. Agenda Einleitung JDA Lösungs-Portfolio Übersicht Case Study Krones AG: –Warum JDA? –Herausforderungen im Anlagen- und Maschinenbau –SCM Ansatz für projektbezogenes Auftragsmanagement –Implementierte Lösungen und deren Integration in SAP –Projektansatz und Lessons learned Zusammenfassung Q&A – Diskussion

4. Copyright 2011 JDA Software Group, Inc. Closing the loop with Integrated Business Planning Approach Production LocalPlan Engineering LocalPlan Sales LocalPlan Finance LocalPlan Adjust Monitor Closed-Loop Execution Process Closed-Loop Planning Process Execute Plan Learn Leading companies have adopted a closed-loop approach across Sales, Planning, Execution and Finance

5. Copyright 2011 JDA Software Group, Inc. Agenda Einleitung JDA Lösungs-Portfolio Übersicht Case Study Krones AG: –Warum JDA? –Herausforderungen im Anlagen- und Maschinenbau –SCM Ansatz für projektbezogenes Auftragsmanagement –Implementierte Lösungen und deren Integration in SAP –Projektansatz und Lessons learned Zusammenfassung Q&A – Diskussion

6. Copyright 2011 JDA Software Group, Inc. The End to End Supply Chain StrategicalTactical OperationalExecution Network Optimisation Inventory Optimisation Distribution Planning Production Scheduling Production Planning Replenishment Planning Transportation Management Supply Planning Demand Supply Balancing TMS S&OP Procurement Inventory Management Production Planning Demand Management Order Configuration Order Promising Allocation Management Transportation Planning Sales & Operations Planning Supplier Collaboration Production Sequencing ETO Project Portfolio Planning

7. Copyright 2011 JDA Software Group, Inc. Sales & Operations Planning StrategicalTactical OperationalExecution Network Optimisation Inventory Optimisation Distribution Planning Production Scheduling Production Planning Replenishment Planning Transportation Management Sales & Operations Planning Supply Planning Demand Supply Balancing TMS S&OP Procurement Inventory Management Production Planning Demand Management Order Management Order Promising Allocation Management Transportation Planning Transportation Management Supply Planning Demand Management Key Functionality Single plan for finance, marketing, sales, supply & inventory Alerts, exceptions and approval workflows (standard & custom) Scenario management with ‘plan to plan’ comparison Complete plan financial analysis (revenue, margin, cash flow) Easy Excel based front end user interface Key Business Benefits Improved planning responsiveness (quarters / months to weeks/days) Aligned consensus plan (improved alignment) Real-time global supply chain information visibility Strategic / Tactical & Operational S&OP in one solution ETO Project Portfolio Planning

8. Copyright 2011 JDA Software Group, Inc. StrategicalTactical OperationalExecution Demand Supply Balancing ►Operations Planning in ETO Context Network Optimisation Inventory Optimisation Distribution Planning Production Scheduling Production Planning Replenishment Planning Transportation Management Supply Planning Demand Supply Balancing TMS S&OP Procurement Inventory Management Production Planning Demand Management Order Configuration Order Promising Allocation Management Transportation Planning Sales & Operations Planning Procurement ► Production Planning  Material availability plan  Existing PO’s  Supplier / Material / Quantity / Date / Factory  PO’s  Supplier / Material / Quantity / Date / Factory Supplier Collaboration 2 2 3 3 4 4 4 4 Production Sequencing 1 1 Order Management ► Operations Planning  Order book  By customer order no.  By product / solution  Quantity  Customer order reference / order status 2 2 ETO Project Portfolio Planning Project Portfolio Management ► Operations Planning  Project Forecast, Bids and signed Order book  By customer, by due dates  By product / project type  Quantity / project size  Customer order reference / project status 1 1 Inventory Management ► Production Planning  Supply plan  By manufacturing location  By product  Quantity  Customer order reference 3 3

9. Copyright 2011 JDA Software Group, Inc. StrategicalTactical OperationalExecution Operations Planning in ETO Context Network Optimisation Inventory Optimisation Distribution Planning Production Scheduling Production Planning Replenishment Planning Transportation Management Supply Planning Demand Supply Balancing TMS S&OP Procurement Inventory Management Production Planning Demand Management Order Management Order Promising Allocation Management Transportation Planning Sales & Operations Planning Key Business Benefits Reduction in lead times Improvements in ‘on time’ ex-factory shipments Reduction in both WIP and finished goods inventory at production facilities Improved planning frequency Key Functionality Complex manufacturing constraint representation sequence dependent setups multi-routing production planning consider resource capacity, labour, materials Due date order quoting ex-factory Production Sequencing ETO Project Portfolio Planning

10. Copyright 2011 JDA Software Group, Inc. The End to End Supply Chain StrategicalTactical OperationalExecution Network Optimisation Inventory Optimisation Distribution Planning Production Scheduling Production Planning Replenishment Planning Transportation Management Supply Planning Demand Supply Balancing TMS S&OP Procurement Inventory Management Production Planning Demand Management Order Configuration Order Promising Allocation Management Transportation Planning Sales & Operations Planning Supplier Collaboration Production Sequencing Supplier Collaboration ETO Project Portfolio Planning

11. JDA Solution for Project-driven industries

12. Copyright 2011 JDA Software Group, Inc. Engineer-to-Order Environment Presents Unique Constrained-Planning Challenges Upstream / downstream resource conflicts Planning & execution coordination complexity Silo thinking with lack of cross functional synchronization Upstream / downstream resource conflicts Planning & execution coordination complexity Silo thinking with lack of cross functional synchronization APICS Definition Engineer-to-Order: Products whose customer specifications require unique Engineering design, significant customization or new purchased materials. Each customer order results in a unique set of parts numbers, bills of material and routings.

13. Copyright 2011 JDA Software Group, Inc. Product complexity, lack of synchronization and visibility – Key drivers of non-value add effort & waste Creation of an offer is time consuming Lack of visibility into production progress High number of enginnering changes causing delays Space constraints for assembly Lack of system support for high number of manual plan changes Procurement process starts late due to system restrictions Lack of visibility into suplier capacity lead to sub-optimal planning and late deliveries Effects of problems in supply chain not visible Huge effort to keep delivery promises

14. Copyright 2011 JDA Software Group, Inc. Background on ETO Projects Planning Pain Points and Root Causes Need to shorten lead times Difficulty to deliver projects On-Time On- Quality Internal and external changes accepted without evaluating impact on cost and schedule across programs Frequent and ongoing design changes disturbing manufacturing process Communicating & escalating planning issues and initiating re-planning Resource Allocation is done by multiple project managers in silo mode – typically first-come, first serve Firefighting & expediting efforts with or without physical material flows Unconstrained Planning: Infinite Resource & Material capacity No integrated Master planning linking all the value chain / supply chain No Closed Loop Planning processes to Continuously update project with actuals, Analyse impact of changes, Analyse impact of anticipated problems Re-plan according to the best scenario No Master Planning & Simulation in place PAIN POINT ROOT CAUSES

15. Copyright 2011 JDA Software Group, Inc. Linkage between Program Management & Finance: Process Roles & Responsibilities Business Units Program Mgr Program Manager Has the overall responsibility & accountability for Implementing EVM Reporting, analysis and corrective actions Reviewing and Approving BCRs Finance (Mgr/Lead) Lead set-up of the WBS, Assist in the creation of the IMS Analyze EVM performance to Plan/Actual Generate Cost/EV reports Oversight to ensure EVM is correctly utilized Bus Plan Assurance Input plans to Microsoft Project EVMS SMEs Serves as a consultant Maintain schedule integrity Material Prog Mgr/ Quality/ Create material baseline plan Status Material Baseline Assure quality throughout program life cycle, i.e. test scheduled, as appropriate Integrated Product Team Create detailed planning Status progress to planning Perform corrective actions Request BCRs as required Engineering Operations Finance Finance is part of IPT, but also reports independently BU Finance Integrated Planning Teams

16. Copyright 2011 JDA Software Group, Inc. Levels of Maturity of Companies in ETO industries Integrated Business Planning for Project- driven Business Maturity Model Level 1 = Single Project View Level 2 = Link to Execution Level 3 = Multi-Project View Level 4 = Enterprise / BU Level Sales and Operations Planning People Only key resources are assigned / named Most relevant resources are allocated, mostly unconstraint by capacity All resources are allocated, Master Planning Team in place, resources are capacity constrained Internal and external Resources are allocated, S&OP Team in place Process Single Project Planning, manual or no feed-back loop from execution Single Project Planning, some feed-back loop from execution Work load is actively managed, daily optimization based on actuals Optimization at Enterprise / BU-Level, Scenario Evaluation and Comparison, Managing Future Projects on Top Tools Single Tool or Instance per Project, e.g. Excel or MS-Project Single Tool or single installation per Project, e.g. MS-Project Master Planning Tool connecting to all project plans, e.g. JDA EPP Master Planning Tool connecting to all project plans end2end, Scenario comparison on Sales, EBIT and Metrics, e.g. JDA EPP Metrics Amount of Delay, Financial Risk per Project Amount of Delay, Financial Risk per Project, Cost Reporting (EVM) Overall due date compliance, Scenario Impact on EBIT, Utilization Overall due date compliance, Scenario Impact on Revenue, Working Captital, EBIT, Utilization Methods Used Simple backward scheduling, unconstraint Critical Path, Earned Value Management Multi-Project Critical Chain, Theory of Constraints Multi-Project Critical Chain, Theory of Constraints, Revenue & Margin Optimization

17. Copyright 2011 JDA Software Group, Inc. What is different in this JDA offering? Traditional program planning is done to set the drum beat for engineering, manufaturing, final assembly line and key suppliers –More a means to communicate expectations and due dates for milestones rather than a management & decsion taking tool –Deviations come often as a surprise, always late –Nobody dares to touch ‚Mona Lisa‘ plan –High granularity on defining workload on engineering New approach –Master planning level, leaving detailed plan in place within functions or for existing programs –Capability to actively manage buffers and to secure milestone deliveries On-Time through Multi Project Critical Chain (MPCC) and Theory of Constraints methods (ToC) –Holistic and fully integrated planning, including enginnering resources, internal and external supply chain as well as FAL capacity constraints –Simulation and Optimization of all resources & industrial part, EVM –Offers problem solving suggestions in addition to visual alerting –Delivers a dynamic but always feasible program execution schedule

18. Copyright 2011 JDA Software Group, Inc. JDA EPP Solution Overview Closed Loop Processes covering short term, tactical and strategic horizon Integrated Master Planning Scope Engineering Programme Office Production External Supply Chain Services Short-Term Tactical Strategic Progress Monitoring Problem/Risk Identification and Mitigation – Cross-projects Long-Term View Demand Planner Updates Supply Planner Updates Integrated Project Master Planning What-if and Scenario Analysis

19. Copyright 2011 JDA Software Group, Inc. JDA EPP Solution Overview Closed Loop Processes covering short term, tactical and strategic horizon Integrated Master Planning Scope Engineering Programme Office Production External Supply Chain Services Short-Term Tactical Strategic Progress Monitoring Problem/Risk Identification and Mitigation – Cross-projects Long-Term View Supply Planner Updates Step 1 – Progress update on the tasks for the next 3 months. Integrated Project Master Planning What-if and Scenario Analysis Step 3 – What-if simulation to propagate progress updates into the future and evaluate risk scenarios. Step 2 – Progress is monitored against the Baseline. Step 4 – Collaborate with stakeholders and publish new plan.

20. Copyright 2011 JDA Software Group, Inc. Critical Chain Buffer Definition Following the critical chain principles for single project view: –The project ETO1 is scheduled in EPS mode (start as early as possible), respecting all contingency and feeding buffer constraints (as we defined a contingency buffer = 50% of task buffer on the critical path, we see as expected an end delivery date of the project coming earlier than previously) 13 april (17 days Contengency buffer) Critical Path Task Buffer Target due date Customer due date Feeder Buffer for task not on the critical path

21. Copyright 2011 JDA Software Group, Inc. JDA EPP Solution Overview Reporting, single project view Visibility into Milestones, Critical Path, Interdependencies, Baseline vs. Actuals

22. Copyright 2011 JDA Software Group, Inc. JDA EPP Solution Overview Reporting on Multi-Project Resource Workload, Cost and Budget Consumption Financial Metrics: Cost Projection & Budget Control at BU Level PROG 1 PROG 2 PROG 3 PROG 4 PROG 5 Shift of load Catch-up Baseline PROG x Load Graph

23. Copyright 2011 JDA Software Group, Inc. Next Step Ahead: Trend Analysis & Alerting on MPCC buffer consumptions Project Portfolio View Critical Resources Workload Drill down

24. Copyright 2011 JDA Software Group, Inc. Value Proposition for JDA solution Decrease of Project Lead Times Feasible plan for both material and capacity Better Resource Utilization Reduction of fire-fighting mode Less time wasted to resolve allocation conflicts Decrease of Planning cycle Time from hours to minutes Increase of market share OTD Performance Improvement Reduce Penalties Overtime Reduction Decrease expedited freight cost WIP reduction Increase Operational Throughput Increase Customer Satisfaction Improved competitive position BUSINESS BENEFITS IMPACT

25. Copyright 2011 JDA Software Group, Inc. Agenda Einleitung JDA Lösungs-Portfolio Übersicht Case Study Krones AG: –Warum JDA? –Herausforderungen im Anlagen- und Maschinenbau –SCM Ansatz für projektbezogenes Auftragsmanagement –Implementierte Lösungen und deren Integration in SAP –Projektansatz und Lessons learned Zusammenfassung Q&A – Diskussion

26. Project Centric Businesses Krones Case Study

27. Copyright 2011 JDA Software Group, Inc.

28. Krones offers turn-key solutions for the filling and packaging industry and for the production of beverages - 4,000 concurrent projects - Orders can have up to 2,000 jobs, 300,000 jobs managed in total - 10,000 concurrent work orders and 120,000 jobs / work packages - custom-built engineering and production for every order “growing” bill of material (concurrent engineering) JDA Customer: Krones AG Providing multi-project coordination, optimization & execution End Product

29. Copyright 2011 JDA Software Group, Inc. Krones offers turn machinery for the filling and packaging industry and for the production of beverages - 4,000 concurrent projects - Orders can have up to 2,000 jobs, 300,000 jobs managed in total - 10,000 concurrent work orders and 120,000 jobs / work packages - custom-built engineering and production for every order “growing” bill of material (concurrent engineering) JDA Customer: Providing multi-programme coordination & execution Need end-to-end visibility of project from design, engineering, manufacturing, and services Need visibility into shared resource needs across projects Need to coordinate procurement with product progress to minimize capital lock-in SAP did not have the capabilities and could not provide visibility across SAP modules – PP, PS, MM, SD, and HR JDA EPP was far more capable than any comparable tool in the market JDA team had superior industry knowledge and worked with us as a team/partnering mode Solutions deployed and integrated into SAP: JDA Enterprise Project Planner (EPP) for multi-project management JDA Factory Planner (FP) for production management 20% increase in throughput with no increase in headcount Realistic due date quotes, no more promises based on static lead times Pro-active order management to enables higher service levels Less employee burnout due to incessant overtimes

30. Copyright 2011 JDA Software Group, Inc.

37. Agenda Einleitung Der Markt für SCM-Lösungen – Gartners Sicht JDA Lösungs-Portfolio Übersicht Case Study Krones AG: –Warum JDA? –Herausforderungen im Anlagen- und Maschinenbau –SCM Ansatz für projektbezogenes Auftragsmanagement –Implementierte Lösungen und deren Integration in SAP –Projektansatz und Lessons learned Zusammenfassung Q&A – Diskussion

38. Copyright 2011 JDA Software Group, Inc. Summary

39. Copyright 2011 JDA Software Group, Inc. Agenda Einleitung Der Markt für SCM-Lösungen – Gartners Sicht JDA Lösungs-Portfolio Übersicht Case Study Krones AG: –Warum JDA? –Herausforderungen im Anlagen- und Maschinenbau –SCM Ansatz für projektbezogenes Auftragsmanagement –Implementierte Lösungen und deren Integration in SAP –Projektansatz und Lessons learned Zusammenfassung Q&A – Diskussion

40. Copyright 2011 JDA Software Group, Inc. Hans-georg.kaltenbrunner@jda.com LinkedIn