Improving Manufacturing Efficiency and Profitability- A case study in Plantelligence

1. Improving Manufacturing Efficiency and Profitability- A case study in Plantelligence

2. Business Analysis • Identify Long Chain “Buy/Make/Sell” Business Processes • Identify Business Requirements and Metrics • 137 Critical Requirements • Map Business Requirements to Technology Vendors

3. Critical Business Requirements

4. MTO Project Objectives • Develop Full Suite of Integrated Manufacturing Business Processes (MES) • Integrate Long Chain Business Processes that Encompass SAP, MES, and DCS • Develop a Standardized Configuration that enables Replication of Best Business Practices • Determine Value of MES Integration

5. Scope of MTO Project Collaborative Forecasting Capability to Promise Planning Order Fulfillment Customer Scheduling Data Validation Material Balance Order Placement Operation Directives BalanceModels ProductionTransactions ProcessRecipes Batch Record Planned vs. Actual Certificate Of Analysis Adv. Process Control Process History Process Analysis Real-time Quality Management Process Simulation Process Orders MRP Regulatory Controls SAP Invoice Customer Resource Consumption Engineering Workflow Fisher Provox

6. MTO Project Completion Plantelligence ™ v1.0 was commissioned in May 1999 at Equistar Chemicals’ High Density Polyethylene facility located in Matagorda, Texas.

7. Benefits Analysis (+) Average Sales Price (-) Feedstock Cost Pre-Tax Operating Income Net Operating Margin EVA (-) (-) Variable Cost (-) Total Production (x) Capital Cost (-) Fixed Cost

8. Plantelligence Value Creation Annual Pre-Tax Operating Income

9. Value Creation - Production Improved troubleshooting capabilities leading to faster root cause identification and elimination.

10. Value Creation - Average Sales Price Increased margins due to accurate product costs improving scheduling.

11. Value Creation - Variable Cost Establishing and daily monitoring of Real Time KPIs.

12. Value Creation - Feedstock Rapid identification of raw material loss sources.

13. Value Creation - Fixed Costs Automation of work processes.

14. Advanced Process Control Data Historian Example Manufacturing Process -Today Daily inventory update Monthly reconciled consumption, production and cost reports Business Management ERP Business Staff Develops standard costs No daily economic data Costs reported on a monthly basis Plant Management Shift logs and morning report, includes production, quality, safety and environmental data Data manipulationData validationData entry Operations

15. Integration Capabilities • Automatic production reporting • Greater visibility of work in progress (for CTP) • Actual consumptions for MRP and product costing (for PTP) • Operational benchmarking and institutionalization of best practices - Process Excellence Sustainer • Performance against benchmark (for KPI’s) • Customer technical support (for CRM) • Facilitate alignment of plant teams for improvement opportunities Plant PerformanceReal-time response to operational variability due to more timely, accurate and contextual information Production Management ProductionAccounting Manufacturing Vision With Plantelligence Business Management Accurate decisions based on validated real-time information ERP Business AgilityImproved decision making with more timely and accurate information Business Staff • Actual consumption on a daily basis by product batch • Automatic classification to the highest margin product • Alarming and prompting for assignable cause • Batch records that include process variables, lab data, batch number, rail car number, and other relevant business data PlantManagement KPI Operations ERP Integration Advanced Process Control KPI Data Historian Business Process Integration

17. Onward to Version 2.0