Presentation on theme: "Kieran O‘Connor, SAP – Moderator Vivek Bapat, SAP Pat Kennedy, OSIsoft"— Presentation transcript:
1Insights, Challenges and Opportunities for CIO‘s in Capital Intensive Industries Kieran O‘Connor, SAP – ModeratorVivek Bapat, SAPPat Kennedy, OSIsoftPaul Kurchina, KurMeta
2Agenda Introduction Vision of the Perfect Plant Energy Management Asset ManagementClosingQ & A
3Collaborative Ecosystems Business Process Experts – BPX.SAP.com BPX allows ecosystem customers and partners to accelerate co-innovationLowers costs to scale and manage partnerships and alliancesCollaboration on projects and new solutions can span departments, companies, and industry boundaries
4Community Involvement Through BPX Corporate Social Responsibility - https://www.sdn.sap.com/irj/sdn/bpx-csrGovernance Risk and Compliance - https://www.sdn.sap.com/irj/sdn/bpx-grcManufacturing - https://www.sdn.sap.com/irj/sdn/bpx-manufacturingBlogs + Forums + ArticlesPerfect PlantIn Pursuit of the Perfect PlantSustainabilityCollaboration WorkspaceEnergy ManagementAsset Management
5Communication Across Discussion Platforms BPX facilitates the cross-community communications essential in the quest for manufacturing excellence
6Introduction Perfect Plant Blogs BPX.SAP.com Book Information
7Chapter Outline – “ In Pursuit of the Perfect Plant” Book
9Static Business Models are challenged Supply Chains evolving to Supply Networks Contract MfgOutsourcersSuppliersCustomersMfgNew Customers3PL’sNew Sales ChannelsNew SuppliersShared ServicesCo-InnovatorsNew ProductsDemand Driven SupplyGlobalizationDemand-DrivenInnovationBusiness DriversGlobalization leading to supply & demand volatility and riskNetwork complexity increases need for visibilityRising costs and shrinking marginsDifferentiation based on superior customer service
10Intermediate customer order Deliver Efficiency and Responsiveness: Continuously Sense, Evaluate, & Respond to Network DynamicsSENSEEVALUATERESPONDContract MfgOutsourcersSuppliersCustomersMfgNew Customers3PL’sNew Sales ChannelsNew SuppliersShared ServicesCo-InnovatorsNew ProductsTo “Network”From “Chain”Economist: Business 2010Control & CommandIntermediate customer orderChaos-IntolerantEfficiencyConnect & CollaborateEnd-customer demandChaos-TolerantResponsiveness“The 2010 organization will be more dependent on the flow of data between different locations inside and outside the boundaries of the organization”traditional supply chains, static roles and responsibilities of each company, processes optimized for pre-defined roles,As Supply Chains evolve from Linear Supply Chains to Supply Networks, the focus should be on the delivery of the End-to-End processes. In the past the roles and responsibilities of each company were more or less static and the processes optimized for these pre-defined roles.Roles are evolving and changing. Everyone has to work in concert to deliver value to the end customer.
11Processes: Flexible, Extendable Visibility: Network Wide Deliver Efficiency and Responsiveness: Continuously Sense, Evaluate, & Respond to Network DynamicsSENSEEVALUATERESPONDContract MfgOutsourcersSuppliersCustomersMfgNew Customers3PL’sNew Sales ChannelsNew SuppliersShared ServicesCo-InnovatorsNew ProductsTo “Network”From “Chain”What’s NeededProcesses: Flexible, ExtendableVisibility: Network WideControl & CommandIntermediate customer orderChaos-IntolerantEfficiencyConnect & CollaborateEnd-customer demandChaos-TolerantResponsivenesstraditional supply chains, static roles and responsibilities of each company, processes optimized for pre-defined roles,As Supply Chains evolve from Linear Supply Chains to Supply Networks, the focus should be on the delivery of the End-to-End processes. In the past the roles and responsibilities of each company were more or less static and the processes optimized for these pre-defined roles.Roles are evolving and changing. Everyone has to work in concert to deliver value to the end customer.11
12The Corporate IT Challenge: Bring together Processes and Information ResponsivenessInformationCollaborative NetworkInformation + ProcessCollaborative NetworkCoordinated NetworkUnstructuredVisibilityAutomateBuildSupplyEfficiencyProcessCoordinated NetworkStructuredHow businesses move between zones. Concept of “dead zones”What happens in the zone of complacency – commoditization ( others catch up – e.g. Dell, Walmart)What happens in the zone of complexity ( innovation occurs – e.g. Apple releasing new products)Market rewards companies that do both well – eg Apple – (Share wratings information).As businesses innovate across innovation ( product or service), manufacturers must maintain a balance between the twoUnstableStableDemand
13The Impact on Manufacturing: M&A, Heterogeneity, Fast Moving Products Global CoordinationSource: AMR Research, 2006Number of PlantsMore than 4021-4011-206-102-51Local ExecutionSource: Aberdeen, 2006BICAll OthersReduce Inventory CostsShorter Lead Times RequiredIncreasing Demand UncertaintyIncreasing Product MixShrinking Product Life CycleOperationsProductionHigh supply network inventoriesPoor asset utilizationDelayed product introductionsIncreasing defects, high WIPPoor compliance, recallsMissed customer due-dates
14The Impact on Manufacturing: M&A, Heterogeneity, Fast Moving Products Global CoordinationSource: AMR Research, 2006Number of PlantsMore than 4021-4011-206-102-51Information & ProcessSource: MESA Metrics Survey, 2006IT Functions or Software Applications in UseSpreadsheetsERPISO and Document Mgmt.Labor/T&AEAM or CMMSData Collection – Bar CodingProduction DispatchingProduct Track & TraceWork Instruction DeliverySPC/SQCProcess ManagementMESPlant DashboardsResource Allocation & StatusCAPA and WorkflowAdvanced or Finite SchedulingPLM/PDMRFIDHigh TCO- multiple systemsMulti-plant deployment difficultData redundancy and latencyITLocal ExecutionSource: Aberdeen, 2006BICAll OthersReduce Inventory CostsShorter Lead Times RequiredIncreasing Demand UncertaintyIncreasing Product MixShrinking Product Life Cycle+OperationsProductionHigh supply network inventoriesPoor asset utilizationDelayed product introductionsIncreasing defects, high WIPPoor compliance, recallsMissed customer due-dates
15SAP Manufacturing Platform Delivers Information and Process Integration CoordinationResponsivenessPLANMAKEDELIVEROperationsITExecutionEfficiencyMAKEProduction
16Integration/Intelligence Mfg Composition Environment SAP Manufacturing Platform Delivers Information and Process IntegrationCoordinationResponsivenessPLANMAKEDELIVEROperationsITIntegration/IntelligenceMfg Composition EnvironmentReusableComponentsManufacturing PlatformExecutionEfficiencyMAKEProduction16
17SAP Manufacturing Platform: 1. Network Wide Visibility EnterpriseSupplier ProcessesIntegration/IntelligenceMfg Composition EnvironmentReusableComponentsERPSCMPLMMIIDistributor ProcessesLOBContract ManufacturerDevicesInspection/ Equipment TestingWeigh ScalesSCADA / DESHMIPlant Data CollectionRFID SensorsPLCDevice IntegrationEnvironmental Building ManagementPlant Historian
18SAP Platform: 2. Process Continuity Supplier ProcessesMfg Composition EnvironmentERPSCMPLMMIIbusiness process platformDistributor ProcessesReusableComponentsContract ManufacturerIntegration/IntelligenceInspection/ Equipment TestingWeigh ScalesSCADA / DESHMIPlant Data CollectionRFID SensorsPLCDevice IntegrationEnvironmental Building ManagementPlant Historian
19SAP Platform: 3. Process Composition SCMERPPLMMFGRestart ProductionRedesign SKUReplenish and ReplanUpdate BOM’sProduce new revision of the SKUQA Identifies Lead in paint on a productStop all productionNotify SuppliersNotify CustomersCheck WarrantyCompliance NoticeIdentify range of defective lotsHold defective lot(s) in warehouseIdentify all shipmentsRecall all ShipmentsU.S. product recalls have increased about 85% since Items made in China are not the only ones that have been faulty or tainted, but as that country has entrenched itself as the global factory, it has become the key trouble spot. About half of the 467 products recalled in 2006 were made in China, according to the U.S. Consumer Product Safety Commission, up from 110 in In August, Mattel recalled almost a million toys that were made in China and decorated with lead-based paint. That followed recalls of pet food tainted with melamine and toothpaste laced with an ingredient found in antifreeze. And Foreign Tire Sales, a 13-employee distributor of tires manufactured in China, has recalled about 450,000 tires suspected of being defective. The company's Chinese manufacturer, Hangzhou Zhongce Rubber, has denied responsibility. Although FTS plans a court battle, U.S. decisions aren't often enforceable in China, and the company will likely have to shoulder the estimated $90 million cost of the recall. "I wasn't in tune to the fact that this could be a big problem," Richard Kuskin, the company's president, told BusinessWeek.
20SAP Platform: 3a. Design New Processes across silos SCMERPPLMMFGRestart ProductionRedesign SKUReplenish and ReplanUpdate BOM’sProduce new revision of the SKUQA Identifies Lead in paint on a productStop all productionNotify SuppliersNotify CustomersCheck WarrantyCompliance NoticeIdentify range of defective lotsHold defective lot(s) in warehouseIdentify all shipmentsRecall all ShipmentsU.S. product recalls have increased about 85% since Items made in China are not the only ones that have been faulty or tainted, but as that country has entrenched itself as the global factory, it has become the key trouble spot. About half of the 467 products recalled in 2006 were made in China, according to the U.S. Consumer Product Safety Commission, up from 110 in In August, Mattel recalled almost a million toys that were made in China and decorated with lead-based paint. That followed recalls of pet food tainted with melamine and toothpaste laced with an ingredient found in antifreeze. And Foreign Tire Sales, a 13-employee distributor of tires manufactured in China, has recalled about 450,000 tires suspected of being defective. The company's Chinese manufacturer, Hangzhou Zhongce Rubber, has denied responsibility. Although FTS plans a court battle, U.S. decisions aren't often enforceable in China, and the company will likely have to shoulder the estimated $90 million cost of the recall. "I wasn't in tune to the fact that this could be a big problem," Richard Kuskin, the company's president, told BusinessWeek.
22SAP Platform: 3c. Re-use Process ITIntegration PlatformMfg Composition EnvironmentReusableComponentsPLANMAKEDELIVERProcess ContinuityOperationsManufacturingLean Production
23Components & Influencers But, Platform is not enough: Planning, Execution, & Assets must be alignedThe Perfect PlantPerfect PlantComponents & InfluencersResponsive PlanningAdjustments are not driven primarily by unplanned events in manufacturing but rather by demand shifts and other factors. Manufacturing is able to mange these changes more rapidly and reliably.OperationalPlanningEfficient Executionis monitored and nearly event free due to proactive monitoring and automated event handling that is tightly coupled with EAM and the enterpriseManufacturing ExecutionAsset Performanceand Utilization are monitored and events are triggered automatically.EAM processes are optimized and all asset content is available in a single source. EAM process are tightly linked to Manufacturing ProcessesThe perfect plant has all critical components for execution aligned combining Asset PerformanceThe perfect plant is comprised of 3 PillarsAsset Performance and UtilizationPlanningManufacturingReduction in variability in Operations Planning can be influenced by variances in Asset Performance and Manufacturing Execution.The Perfect Plant is the ultimate goal to optimize utilization of your assets. In the Perfect Plant you have visibility into all operations including production performance and your assets, providing a 360 degree view of your operations. This visibility into your plants provides the ability to respond faster to operational issues and minimize impact to your business and bottom line. There are 3 levers that influence the Perfect Plant:Asset Performance- Movement from “preventative maintenance” to “collaborative maintenance” to improve asset performance and utilization. By leveraging new capabilities you can improve your Asset Management business processes. Improvements can represent millions of dollars for each percent increase in efficiency and asset performance.Manufacturing Execution- The ability to move from reactive to proactive management of your manufacturing process to improve manufacturing performance. xMII enables increased visibility into and control of your manufacturing process. Significant savings in manufacturing costs have been realized in as little as 90 days.Operations Scheduling- Variability in Operations scheduling in heavily influenced by Asset Performance and Manufacturing. This can be reduced immediately buy addressing Asset Performance and Manufacturing execution and improve on-time delivery.Combined with SAP ERP, SAP xApps, xMII and VIP provide you the ability get a complete view in to your plants. With xMII you can connect to your plant floor systems and assets, monitor key performance indicator trends and trigger actionable alerts such as plant maintenance notifications and quality issues in manufacturing. VIP gives you a complete view of all relevant content and workflows to maintain your assets. Combined, these capabilities give you a complete view into your plant assets.
24Your Perfect Plant with SAP: Efficiency combined with Responsiveness EnterpriseSAP Business SuiteCoordinationPlanningInside Plant (MOM) :APO, LPO, VisiprisePartnersAsset MgmtExecutionConnectivity, SCADA, HMIInside Plant (Automation) :PartnersShop Floor Process Control
25Your Perfect Plant with SAP: Efficiency combined with Responsiveness CoordinationPlanningIntegration/IntelligenceMfg Composition EnvironmentReusableComponentsAsset MgmtExecutionConnectivity, SCADA, HMIShop Floor Process Control25
26Your Perfect Plant with SAP: Efficiency combined with Responsiveness CompositesEquipment status visualizationOrder GANTT ChartProduction Line VisualizationProduction Order DetailsxMII Integration TemplatesPP, QM, PPPI, IDOC TemplatesISA 88, SP 95 Spec SheetsSample ProjectsCo-Innovation EcosystemCoordinationPlanningIntegration/IntelligenceMfg Composition EnvironmentReusableComponentsAsset MgmtExecutionConnectivity, SCADA, HMIShop Floor Process Control26
27SAP Value: Orchestration, Composition, Execution 1OperationsSingle Vendor SolutionConnect End to End ProcessesMergers and AcquisitionsDesign, Mfg, Build anywhereCompliance across value chainShop Floor Process ControlConnectivity, SCADA, HMIExecutionPlanningCoordinationIntelligence / IntegrationManufacturing Data ServicesBusiness Logic ServicesAsset MgmtOrchestrationEnterprise StandardizationIT2Standardization across plantsOpen, customizable applicationsBalance Central/Local ControlCredible Solution to Plant FloorCompositionEmpower Plant PersonnelProduction3Autonomous operationIntegrated in ERP/AutomationReliable, 24x7 decoupled opsFlexibility with upgradesExecution
29Perfect Plant – A Definition Three Flows (Energy, Mass, Info)Emmanuel Savas (1965)“Computer Control of Industrial Processes"Maintained, Monitored, ActionableSelf HealingFuture Proofed PlantMinimized FootprintFinancial, Environmental,Profitable & Sustainable29
30Today’s Energy Context Significant increase in energy prices in the recent yearsPetroleum1, 30 to 40% in 3 yearsNatural gas1, 20 to 30% in 5 yearsCoal1, 5 to 10% in 2 yearsElectricity, 3 to 10% per yearDirect effect on production costsHeating/Cooling operationsSteam productionOperation of heavy equipment and motorsMaterial movementsCannot overcome “laws of thermodynamics1 Source - USA Energy Information AdministrationPricing of oil (3 main factors why prices are driven higher and higher) : cost of drilling going up, less reserves, demand is going up as well.30
31Business Opportunity to “Perfect Plants” Energy & EnvironmentMore energy = more emissionsOutside USWorld (Kyoto): 6% reduction of the greenhouse gases between 2008 and 2012Based on 1990 levelsCarbon CreditsRelate - Business – Energy – Environment“Industrial greening” is not business as usualSignificant Unprecedented GlobalBusiness Opportunity to “Perfect Plants”Why is this so significant. Because it is global reach. The world that’s a big market. The carbon credit exchange will be the single largest market cap within the next 5 years.31
32Energy Management In the Perfect Plant Kodak Case Study
33Largest Manufacturing Sites Kodak ParkLargest Manufacturing SitesLocated in Rochester, New YorkReferred to as a “City Within a City”1300 Acres (5,200,000 sq m)150 BuildingsNearly 30 Miles of Roads11,000 EmployeesOperates Its Own Fire Department, Railroad & Water and Waste Water Treatment PlantsOperates Two Power Plants33
34Utilities Consumption 125 MW Electrical Demand35,000 SCFM Compressed Air Load80,000 Tons Refrigeration Capacity2,000,000 lb/h Steam Load30,000,000 g/day Process Water
35Keeping Track of Consumption / Utilization 600 Electric Distribution Meters600 Additional Distribution Meters for:Steam, Chilled Water, Brine, Compressed Air, Process Water, Nitrogen, Natural Gas, etc.Significant Metering Used within the Power Houses to Manage the Generation SideMeasurement points125 concurrent users/180 + views27 Systems interfaced30-40 electric meters already tied inA project will be addressing 40 more later this spring35
36Kodak Park – Data Sources BAS (Building Automation System)Rosemount - Fix 32Siemens - ApogeeEmerson - Delta VSQL Based HistoriansDCS (Distributed Control Systems)Fisher ProvoxWestinghouse WDPFWestinghouse OvationTaylor Mod 300Emerson DeltaV
37This just shows that everyone is looking at energy – note that this is on the SAP Enterprise Portal as an iView. In particular it is the HR Portal where people can look at bonus so everyone checks every day on resouces.
39This is their major power consumer, just showing the decrease in both a and c wings.
40This is really interesting – the peaks are use of steam to regeerate catalyst and note that one is at 4pm – the peak power consumption at NY ISO so they talked to the process people and the result was the next slide.
41They eliminated two of the 4 regen cycles as unnecessary and also moved them away from the 4pm, was both an absolute savings and a peak savings
42Harvest TimeThe Energy Information System (EIS) has been an essential tool to help us reach our goal of “One Powerhouse for Kodak Park” Collectively these efforts have yielded savings > $20 millions annuallyAll leading up the the BIG BANG – they reported $21MM in annual savings just into the proect (maybe 18 mo) and last month they reported that this number had climbed to $28MM in annual savings – real money.
43James Breeze, Engineer and Project Leader, Eastman Kodak “ We are identifying savings opportunities on a regular basis. OSIsoft products have exceeded our expectations. They are viewed as critical tools to help us assess and meet our very aggressive site energy reduction goals that amount to several million dollars annually ”James Breeze, Engineer and Project Leader, Eastman Kodak
44Energy Management In the Perfect Plant How to pursue the “Perfect Plant”
46Lessons Learned at Kodak Capital Spent on FaithNo BIG BANG – 1000 little bangsContinuous Improvement ProcessCombined Capital and Intelligence OperationInfrastructure ApproachLowers the Cost of CuriosityCulture Change
47Top Questions for Energy Management Can you measure because if not you cannot manage.Is it on line – if not – you do not get collaborationDo you know the tariff’s – sometimes minimum energy is NOT minimum costTime scale – data received after the fact only good for assessing blameGranularity – must have 4 x nyquist frequencyDelay – people lose interestTraining – collaboration is keyContinuous Improvement – Kaisen, Incident Investigation, Recommendations, Follow up
52Physical and Digital Plants Physical PlantDigital PlantTools required to enableHammersWrenchesSawsWeldersMetersEtc.Tools required to enableData historiansDocument Management SystemsMaintenance systemsReliability-centered maintenanceMobile devicesEtc.
53Plant User Experience and Integration Enterprise Asset Management and AnalyticsPredictiveAnalyticsFleet-Wide Monitoring Monitoring and Diagnostics CentersReal Time Data FoundationWirelessWireless SensorsRFID TagsWireless WarehouseMobile RoundsMaintainenceATM
54Journey to the “Perfect Plant” – Example DashboardsEnergy Management3D ModelsReal Time KPIsVoice ActivationLeverage TechnologyEAMMaintenance ATMsWireless SensorsPredictive AnalyticsWireless WarehouseMobile Operator RoundsTool ManagementRFIDCreate theDesireDare to DreamPilot TestsIT and Plant CollaborationVisionStandardsBOM’SData HistoriansWIFI NetworkFix the Foundation
55Plant to Fleet – Data Foundation KPI’sDashboardsFleet OptimizationProcess Costs, Asset Health,Operational Performance, Market Value,Discrete dataLimited valueActionable InformationBus IntelligenceReliability, 4-BlockOutage & De-rate (UCF)Maintenance & MarketAnalysis Framework(PI, ProcessGuard, SAP, UCF, P3M,Predictive Monitoring, NeuCo, LIMS, Plant View ..)Expert SystemsPredictive Monitoring, OptimizationEquipment and Process MonitoringClosed Loop Process OptimizationSystem DashboardsSubject Matter ExpertsWEB VisualizingPlant Alarm, DCS Real-time WEB GraphicsEasy Access to InformationWEB VisualizationEngineering ApplicationsPMAX, Digital Fuel Tracking, Fuel Cost FrameworkProcess Discrete to DataPMAX, DFTS, eNote,Fuel Cost Framework,Alarm ManagementDistributed Control Systems (DCS)Distributed PI HistoriansLarge Population of DataDCS, PLC & PI
58The pursuit of the “ Perfect Plant ” is a Process, a Journey ConclusionsThe pursuit of the “ Perfect Plant ” is a Process, a JourneySolutions from SAP and the Partner Ecosystem are available today to enable the " Perfect Plant "“People” are the main actors in a “ Perfect Plant ” – Business and IT“ Perfect Plant ” is socially & environmentally “Responsible Business Entity”“Perfect Plant” knows it Performance in Real TimeResource Management requires Cultural Change including Business and IT as “ One Team”
59Questions ? Vivek Bapat - SAP Vivek.Bapat@SAP.com Pat Kennedy – OSIsoftPaul Kurchina – KurMetaBusiness Process Experts Community BPX.SAP.com
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