Siemens Production Process and MRP

Description
The report about Siemens' production process and control in detail.

Siemens LimitedElectrical Panels
A Critical Assessment

INTRODUCTION
• In a B2C context, Mass customization is synonymous with

CRM
• However, B2B markets have had customized products much before B2C markets • In this particular case,
– The focus is on a CTO approach adopted in a B2B setup – The Customer interacts via a product configurator to arrive at a particular configuration of the product – an Electrical Panel

SIEMENS Electrical Panel Business
• Manufacturing - Kalwa Plant, Mumbai
High/Medium voltage enclosed switchboards from 3.3 kV to 36 kV

Low voltage (415V), 3 phase switchboards (Motor Control Centers and Power Control Centers)

Control and Relay Panels(for control and remote switching)

Siemens in LV switchboards
• Core competence in panel manufacturing division of Siemens “Delivering quality products on time & as per requirement”. • The product is a modular one with multiple options available through the assembly options of components. • A product configurator is also available as an interface to customers, which acts as a guided selling proposition.

SECTION 1
Program Planning

Product family
• There are four basic product types, each of which is an parent type or umbrella configurable item;
– – – – Drawout Motor Control Centre Non Drawout Motor Control Centre Drawout Power Control Centre Non-Drawout Fuse Switch / MCCB Panel

Motor Control Centre - a number of individual motor starters all powered from the same mains . <--

Power Control Centre – not usually contain any motor starters and would be purely power distribution. -->

Different statutory requirements/compliances in design and construction

Various Electrical Panels

Customization
• Possible across all product families • The four basic product families or parent items require different module sets based on the two requirements
– End load type(motor or non motor) – Draw out or non-draw out

• Sales data analysis revealed that amongst all the modules, non drawout type MCC (Motor Control Centre) constituted over 50% of the sales volume.



Customers collaborate with the manufacturer 3 OR 4 WIRE ELECTRICAL SUPPLY TYPE OF BUSBARS
SWITCHES AND INTERLOCKS

SHORT CIRCUIT RATINGS

Customization Aspects

RELAYS AND PROTECTION

TYPE OF MOTOR STARTER

TYPE OF CONTACTOR

Customized product characteristics
• Electrical panels show the two basic characteristics of being a CTO product:
– Modularized – Differentiation after receipt of customer orders.

• Modules stored in stock based on forecasts
and assembled only on receipt of orders • Demand variability of modules is very low. • Stock of basic panels is not “overstocked” because of large space requirements for storage and working capital getting logged

Modularity
• Truly modular with many different combinations possible. • Just two common parts
– Basic Panel - frame, foundation and plates to cover the sides.
– Mechanical Interlock - A padlock mechanically linked to on/off switch so that the doors of a charged panel cannot be opened.

• Required and optional components are both manufactured in-house and procured from vendor • Lead times associated with panel assembly is high • High valued components are ordered after receiving order from the customer.

Common Parts

BASIC PANEL

Delayed Differentiation
• CODP happens at the point of receiving customer orders and final

assembly.
• High valued modules like instrument transformers and Air Circuit Breakers are ordered after receiving customer orders, others are

forecasted.
• Differentiating modules i.e. relays, circuit breakers, switches, fuses etc are added at the end.

• Assembly takes place at the end

Product family in this Case
• Non draw out type Motor Control Center family

• Total number of modules to be master
scheduled is 121 • Total number of possible variants or unique configurations are huge(in millions) • Although such a huge theoretical range exists, yet a select few, maybe 150 types are commonly used due the similarity in the end user systems

Structuring the planning BOM
Required Characteristics
Annunciators

Parent

Common

Optional Characteristics

Auxiliary Contactor
Basic Panel Feeders Birelays Capacitors Non Drawout MCC Lamps Pushbuttons MCBs Mechanical Interlock MCCBs Meters Terminal Blocks Soft Starter Neutral Grounding

PRODUCT FAMILY: Non Drawout Motor Control Center Characterisitic/ Function Characteristic Values Modules to be Master Scheduled

S No

Total Number of Variants

Remarks This is a psuedo item as it is present across all variants of this product family This is a psuedo item as it is present across all variants of this product family

1

Basic Panel

Basic Panel

1

1

2

Mechnical interlock

Interlock

1

1

3

4

5

6

7

8

9

6 point annunciator 8 point annunciator 12 point annunciator Annunciator 14 point annunciator 16 point annunciator 24 point annunciator 32 point annunciator AC 2 NO + 2 NC DC 2 NO + 2 NC Auxiliary Contactor AC 4 NO + 4 NC DC 4 NO + 4 NC Direct On Line Motor Feeders(DOL) Reversing DOL Motor Feeders(RDOL) Star Delta Motor Feeders Heavy Duty DOL Motor Feeders(HDOL) Type of feeders Fuse Switch Cable Feeders(FSU) Switch Cable feeders Control Transformer Feeders Bus PT Feeders 2M 3M 4M Module size 5M 6M 8M 10M Upto 25A 26A - 57A Type of birelays 26A - 63A 70A - 120A 20 kVAR 25 kVAR Type of capacitor 40 kVAR 45 kVAR Normal Lamp Lamp LED type lamp

7

7

This component gives visual indication of an electrical fault

4

4

Type of contactor determines the switching logic

8

8

Type of feeders

7

7

Size of modules(based on type of feeders)

4

4

Heat sensitivie relays

4

4

Capacitor Type

2

3

Characterisitic/ S No Function 10

11

12

13

13

14

15

16 17 18 19

Characteristic Values Normal/Luminous Pushbutton Mushroom type Selector Actuator 1 pole 2 pole MCB type 3 pole ELCB 0.5A - 16A MCB ratings 6A - 32A 40A - 60A Line incomer Motor Feeder MCCB use DO SFU incomer DO bus coupler NDO bus coupler 63A 100A 125A 160 A MCCB ratings 200A 250A 400A 630A 800A Analog Meter Type Digital Ammeter Voltmeter PF meter Type of meter Trivector meter kWh meter kW meter Yes Neutral Grounding No .25 N Relay casing .5 N 1.5N Yes Soft Starter No 2.5 sq mm 6.0 sq mm Terminal block 10.0 sq mm

Total Number of Variants 3

Modules to be Master Scheduled Remarks 2

4 12 3 Type of MCB

5

45 9

Type of MCCB

2 12 6 Metering

2 3 2 4

2 3 2 4

Non-Drawout MCC

Basic Panel (Common)

Mechanical Interlock (Common)

Auxiliary Contactor (Required)

Terminal Blocks (Required)

Capacitors (Required)

Lamps (Required)

Soft starter (Optional)

Etc…

Etc…
Normal LED type

Product Configuration Process
• Although Siemens uses SAP ECC , it does not use configurator of

SAP
• High level of technological decisions involved -Configurator still in nascent stage

• Configurator is in the form of a spreadsheet.
• Spreadsheet selection is later manually entered into sales orders

and to generate BOM and routing. (possible due to the number
of orders being low)

Demand Planning
• CTO environment – Demand of all variants cannot be

forecasted individually.
• Demand forecasted for modules (assigning usage probabilities)

• Overall product family demand forecasted based on
previous years sales • Growth in demand from previous years is determined

based on managerial discretion

Product Family

Demand forecasted based on previous year sales

Module

Demand forecasted based on usage probabilities

Type1

Type2

Demand forecasted based on usage probabilities

Customer Order Entry
• Customers arrive at their requirements through consultants (usually) • Can use the configurator to arrive at their exact requirement • Can also check and revise the pricing based on their budget allocation. • A knowledgeable sales force can use the same tool and arrive at a quotation based on requirement and pricing. • The delivery lead times can only be quoted manually as of now

Planning Strategy
• Although as of now an excel sheet is used for order entry, the details present in the sheet are copied verbatim in the SAP ERP system at

Siemens.
• Planning strategy followed is similar to Strategy 56 defined in SAP ERP • PIRs are planned at the configurable material level based on forecasts.

• Forecasts are usually carried out at the start of the financial
year(October 1st) for the entire year • Forecasts are reviewed every quarter for upward or downward correction • Usage probabilities are assigned to modules based on historical data.

Planning Strategy
• Usage probabilities vary year to year based on other inputs like regulations, consultants research etc.

• System generates dependent requirement of components
• consumables like control cable - not part of dependent requirement • Output of MRP run (dependent requirements) – PO for vendors and

Stock Transfer for in house products
• Actual Customer Orders consume the PIRs • The lead time is a manual entry, by the procurement department as lots of components have long and variable lead times • Assembly takes place post receipt of customer orders

SECTION 2
Materials Requirement Planning

MRP Procedure
• The level 0 product(panels) is assembled after receipt of customer orders. • LLC of all items is 1 (either procured or transferred from stock) • All level 0 products are grouped in 4 product families

(discussed earlier)
• BOMs generated dynamically – LLC updated after each customer order.

• The BOM are scanned at level 0 and level 1 and accumulated

MRP Procedure
• BOM explosion process
– Arriving at the requirement of all level components from the planned order release and usage probabilities. – A sample chart is shown in the next slide

• From the slide and past figures,
– Demand for Non draw-out type MCC in this year is forecasted to be 100. – Eg. Say 100*0.2=20, 6 point Annunicators, need to be incorporated in MRP spreadsheet.

Required Characteristic

Characteristic Values 6 8 12 14 16 24 32 point annunciator point annunciator point annunciator point annunciator point annunciator point annunciator point annunciator

Usage probabilities 0.2 0.15 0.15 0.3 0.05 0.05 0.1 0.25 0.15 0.5 0.1

Annunciator

Auxiliary Contactor

AC 2 NO + 2 NC DC 2 NO + 2 NC AC 4 NO + 4 NC DC 4 NO + 4 NC

Type of feeders

Direct On Line Motor Feeders(DOL) Reversing DOL Motor Feeders(RDOL) Star Delta Motor Feeders Heavy Duty DOL Motor Feeders(HDOL) Fuse Switch Cable Feeders(FSU) Switch Cable feeders Control Transformer Feeders Bus PT Feeders

0.13 0.06 0.07 0.04 0.4 0.03 0.2 0.07

Module size

2M 3M 4M 5M 6M 8M 10M Upto 25A 26A - 57A 26A - 63A 70A - 120A

0.15 0.05 0.2 0.15 0.3 0.05 0.1 0.5 0.25 0.1 0.15

Type of birelays

Required Characteristic

Characteristic Values 20 25 40 45 kVAR kVAR kVAR kVAR

Usage probabilities 0.3 0.6 0.04 0.06 0.4 0.6 0.3 0.5 0.2 0.1 0.3 0.55 0.05 0.2 0.3 0.5 0.2 0.2 0.17 0.3 0.13 0.04 0.12 0.06 0.08 0.2 0.04 0.3 0.07 0.09

Type of capacitor

Lamp

Normal Lamp LED type lamp Normal/Luminous Mushroom type Selector Actuator 1 pole 2 pole 3 pole ELCB 0.5A - 16A 6A - 32A 40A - 60A Line incomer Motor Feeder DO SFU incomer DO bus coupler NDO bus coupler 63A 100A 125A 160 A 200A 250A 400A 630A 800A

Pushbutton

MCB type

MCB ratings

MCCB use

MCB ratings

MRP Procedure
• End items and components are quite expensive - Lot for Lot (L4L) ordering policy • No netting or lot sizing is needed • The final items (level 0) are MPS items (Gross requirements = MPS quantities) • Planned order release is simply gross requirement quantities offset by lead time, • Lead time assumed 3 days for convenience less than 365 days / 100 panels • Salient features of level 0 components(final product)
– Gross requirements are copied from MPS items (as segment is forecast driven) – L4L policy is used due items being expensive and hence no netting or lot sizing

MRP Procedure
• Salient features of level 1 components
– Requirements = Planned order release quantities * usage probabilities

– The system performs scan for all the components in the Super BOM and
finds LLC, which in this case is maximum1. – The net independent requirements for additional spares of level items like

terminals, pushbuttons, auxiliary contractors is arrived at by adding the
BOM explosion results and forecasted spare requirements – The scrap factor for some of the level 1 components (components) are

considered as 5%. Such items are terminals, auxiliary contactors, pushbutton
switches and lamps. In this case 5% extra is planned over the needed quantities

Parameters for MM
• Basic Material Master
– ABC classification is used
• MCB and MCCB – Type A • Capacitors, Birelays ,Modules and Auxiliary Contactors – Type B • Others like lamp, pushbutton etc – Type C

– Cycle Counting
• Once a week • Permissible tolerances for A, B and C type items are 0%, 2% and 5% respectively

– Parameters which need to be set in MM
• product class • LLC • Lead time for both in-house and procured items • safety stock for type B and C items • ABC code

Parameters for setting for planning horizon
• Minimum lead time needs to be considered for arriving at the length of time buckets.
– Usually terminals are off the shelf items and hence have the least lead time of 4 days. – So the length of time buckets is usually 3 days

• The longest lead time in this case is of MCB and MCCB(in house products) which require lead times of 12 weeks. So

the planning horizon is usually kept at 16 weeks

Parameter for setting of regeneration
• Factors for consideration in setting the regeneration

frequency are:
– The product is a high valued item with long lead time – The time bucket is 3 days

• MRP
– Regenerated every 4th day through a command (not automatic) – Many factors taken into consideration regarding length of regeneration cycle as demand is often lumped with many orders coming together followed by many idle periods

MRP Outputs
• Procurement
? Both in house purchase and external procurement ? Selected manually (as some of the components which are in-house can also be procured from outside if ATP fails for in house production)

• Major outputs
? Planned Factory Order Releases: This is primarily for assembly of the level 1 components. It is also an input to CRP ? Planned Purchase Order Releases: This is primarily for external procurements considering the lead time involved

• CPOs are deleted and recalculated every 4th day
• However the final CPO is released by the planner

MRP Outputs
• • • Order firming happens once customer confirms by accepting the configuration POs are automatically firmed within the PTF and Non-firmed POs automatically deleted Action Messages
– Alarms raised for planned orders scheduled for release within the bucket
– Alarms for out of sync scheduled receipts – Alarms for cases where lead times(normal) lead to delayed delivery



Exception Reports
– Inventory low for C class items – Late and premature order confirmation – Order to be released in past (back orders)



Exception messages
– Incorrect/non existent part numbers – Orders exceeding planned quantities

Recommendations and Conclusions

Recommendations and Conclusions
• Some of the configurations are very common and constitute almost 12% of the sales like a NDO MCC;
– 14 point Annunciators – 2NO + 2 NC auxiliary contactor – DOL feeders – 2M module size – 25 A Birelays – 20 KVAR capacitor – LED Lamp Mushroom type switch – 3 pole, 40A MCB – Motor feeder – 100 A MCCB

• For such configurations product variants can be defined and the item can be treated like MTS and stocked as finished product

Recommendations and Conclusions
Product Configurator Information System
• An online system would help cross-sell and upsell. • BOM explosion and other processes can start automatically after the customer places the order without manual intervention. This would reduce the customer lead time as well.

Modular Design

• This would help in manufacturing modules in those plants which have higher operational efficiencies and then assembling later. This would again help in reducing customer lead time.

Postponement

• Manufacturing modules in different plants and then assembling at the common warehouse would help attaining economies of scale. • This would also ensure optimum resource utilization as final assembly would happen only after customer places the order.



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