The following image shows a high level overview of the Design the Operate end to end process as it is implemented in the S.Factory. For each process step (1-9), we briefly mention what the customer can see and which business roles (for example, Engineer, Worker, Warehouse Clerk, and so on) are involved:
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The end-to-end process for discrete manufacturing industries begins with the develop (1) phase. During this stage, a team develops and evaluates a new variant or version of a product, for example. We illustrate this by the technical evolution of a valve:
The valve on the left features a manual control head without any automatic functions or sensors. The middle valve has an electronic control head that enables remote operation and provides status information (→ valve open or valve closed). The valve on the right is equipped with the latest smart control head, allowing for remote operation and offering sensor data on the valve lever's position. This advanced functionality enables detection of partial blockages and monitoring of valve wear, particularly if opening takes longer than expected.
After release of a new version or variant, the master data (BOM and routing) is transferred from design to production, and the product becomes available to the market for customers to purchase.
To cover production costs, use production resources efficiently, and to ensure that the right components are available at the right time, planning (2) precedes manufacturing. This can involve planning on strategic and/or tactical level leveraging the functionalities of SAP Integrated Business Planning, or planning on an operational level, for example tank planning or detailed production planning using SAP PP/DS.
During the receipt phase (3), raw materials are procured and stored in the warehouse. This phase highlights the processing of Advanced Shipping Notifications (ASN) and the integration of Transportation Management (TM) with Extended Warehouse Management (EWM) through Advanced Shipping and Receiving. Additionally, a quality inspection is conducted before the materials are placed in the warehouse.
In the first production phase (make-to-stock) (4), we manufacture the electronic control head of the valve through in-house, make-to-stock production. This serves as the main focus of the D2O standard tour. Starting with two raw materials—the electronic component of the control head and a protective plate—the worker assembles the control head, which will later be used in the production of the entire valve (step 6).
The worker is guided through the assembly process by projected work instructions displayed directly onto the workbench. Additionally, the system automatically conducts quality inspections at both the raw materials stage and during production to ensure all quality standards are met. Should any issues arise, the system immediately triggers rework actions to guarantee the control head is correctly assembled and ready for direct integration into the production order for the finished product.
During the procurement phase for the valve (5), the customer utilizes our web shop to place their order. Here, they select the desired valve type—such as manual control head, electronic control head, or smart control head—and provide additional details to customize the product, such as a production memo. The outcome of this process step is a sales order with detailed information.
During the second production phase (make-to-order) (6), the valve is assembled using various components such as the valve body, control head, seal rings, sealing plug, and air tubes. This process is initiated via the customer sales order from step 6 and all data collected in the sales order are transferred to the production order. The production order contains all data (operations and bill of material) required to manufacture the valve. Since the valve is tailored to a specific customer need, the manufacturing operations and/or BOM may differ among different valves.
A matrix production approach is employed, utilizing versatile work centers capable of performing a range of production tasks. For example, several assembly stations are available for both assembly and disassembly tasks. The system automatically assigns production orders to the most suitable work center based on factors like the type of activity, product specifications, and resource availability.
After assembly, a worker conducts an in-process quality inspection, including a functional test. If the product passes the test, the valve is moved to storage in the warehouse. In cases of failure, the system initiates a rework loop, followed by another functional test before the valve is finally stored. The entire production operation is supported by robots that transport work-in-progress (WIP) materials between work centers and by an automated warehouse system that manages both the staging of components and the storage of finished valves.
In the delivery (7) phase, the goods are prepared for shipment and distributed to the customer. This process involves picking, packing, and shipping the product. Planning the delivery can be optimized using SAP Transportation Management, which enables the grouping of multiple sales orders for optimal shipment. For example, the system can optimize the route and load plan to ensure timely delivery to different customers with only one truck.
During the operation and service (8) phase, the valve's performance is closely monitored to detect any issues and ensure it functions optimally. Regular checks and maintenance guided by sensor data help in identifying anomalies, triggering preventive measures, and maintaining safety standards. This phase also serves as a link between Discrete Manufacturing and Process Manufacturing within the S.Factory, as the valve (produced in the discrete manufacturing area) is utilized in process manufacturing operations.
During the phase receipt and dismantling of the returned product (9), we demonstrate a circular economy approach aimed at reusing returned customer products as a source for new components instead of exclusively sourcing them from suppliers. After successfully using the valve for many years, the customer returns it to us for recycling. Using an AI agent, we automatically evaluate the available valve data—such as production history, usage history, and service activities—and let the AI agent propose whether to reuse certain components of the valve or scrap it entirely. In cases where reuse is feasible, the worker retrieves the valve from the automated warehouse, where the returned item was stored, and performs the dismantling process. The system provides precise guidance to the worker throughout the dismantling process. Leveraging a camera system, the manufacturing system identifies the specific dismantling steps required at each stage and projects the corresponding work instructions directly onto the worker's table.
For the standard tour, we will focus on component manufacturing (step 4 → red box). The next unit will cover this in detail.