Following on from the special profile in our March 2013 edition, Manufacturing & Logistics IT chief editor, Ed Holden, spoke again with Vittorio Boero, chief information officer at Ferrari, about how the sports and luxury car manufacture's intensive five-year IT re-structuring roadmap, first put in place in 2012, is progressing and the benefits it is bringing to the company.
As Ferrari is renowned for some of the finest high-performance automobiles in the world, its customers demand and expect a particularly high level of service. Faced with increased demands from relatively new markets such as China and the Middle East – where customers are much less willing to wait the standard 12 months for delivery of their vehicle – Ferrari realised that it had to increase production rates in terms of both quantity and speed to meet growing output demand, without compromising on quality.
This presented a profound challenge because each Ferrari is unique. Every customer can customise and tailor his or her new purchase; from unique paint colours to the materials that cover the seats and interior, as well as many other details. The result is that no two Ferrari cars are the same. Increasing customer expectations led Ferrari to realise it needed to put in place an even more responsive and flexible manufacturing and logistics setup, supported by agile business software that could help achieve targets for new production output, while also reducing IT complexity, reducing errors and saving cost.
Vittorio Boero, Ferrari's chief information officer, joined the company at the beginning of 2012, and during that year he and his team immediately began to put in place a wide-ranging five-year technology roadmap, which involved the replacement of many of Ferrari's legacy IT systems. Ferrari also implemented a custom development planning regime with its new IT partners in order to ensure the newly sourced solutions were the very best fit for the company's requirements.
ERP
In terms of the five-year global IT roadmap Ferrari put in place during 2012, the company is currently at the stage 5 of one of the most critical components of the plan – the implementation of its Infor LN ERP system. Ferrari's then-parent company, FCA (the company was spun-off from FCA in January 2016), had initially proposed a centralised IT policy whereby group companies were to standardise on SAP to run the business. However, with a view to facilitate faster production in order to capture and satisfy greater market share in fast-growing economies such as China and the Far East, Ferrari presented what it considered to be a compelling case in favour of the Infor solution. After the agreement to source Infor LN was ratified by FCA, the first implementation stage went live during 2012, with the second following at the beginning of 2013 which supported the launch of the New Engine Family (in strong integration with the MES).
In 2014 Ferrari also launched the S&OP module (Sales Operation & Planning). Integrated within the ERP, S&OP collects the forecast from the network, and uses it as an input for the Supply Chain processes.
During 2015 the company then saw a major leap forward with the completion of a stage of implementation that affected not only the broad Sales, After Sales and Technical Assistance processes within the company but also included an implementation rollout for Formula One too. "With this step we were able to switch off applications related to our legacy ERP," explained Boero.
During September 2015 Ferrari began the implementation of modules within LN to complete the ERP implementation for Finance. Boero pointed out that this is now 50 per cent completed.
Also, in October last year Ferrari began implementing the ERP modules to cover its entire revenue cycle. "This is due to be completed by January next year with three separate go-live dates: July, September and January 2017, so the current status of our ERP implementation is much in line with the original expectations we had when we started the process in 2012," said Boero.
Intelligent Open Network
Another key component within the Ferrari five-year IT plan was the installation of Infor ION (Intelligent Open Network). This provides connectivity between Ferrari's software applications, and enables the company to build individual custom configuration vehicles in sequence in conjunction with the MES (Manufacturing Execution System), while maintaining a high level of operating line efficiencies within the supply chain. With ION, Ferrari does not need to rely on multiple external sequencing, allowing for a decrease in complexity, risk, errors and cost.
Ferrari uses Infor to raise efficiency throughout the organisation; from order taking and manufacturing to the supply chain involved in providing finished cars to customers. The process improvements allow Ferrari to obtain logistical supply chain efficiency at all stages of manufacturing.
Ferrari uses ION to provide connectivity between both Infor and non-Infor applications, enabling integrated business processes such as order configuration, advanced planning and scheduling, assembly line scheduling and sequencing and asset maintenance and management. The solution also enables Ferrari to optimise the supply chain processes, supporting the increase of production of engines for other members of the FCA group such as Maserati.
"Infor ION is one of the most important components within our application landscape because every hour we run more than 200 processes and interfaces involving material requirements collected from our 3PL logistics partners to allow the material to be moved around the production line," said Boero. "Infor has enabled us to reduce the number of anomalies in the system, further allowing us to streamline the production process further. Not only has Infor helped us to increase production, it also helped us to established better relationships between many business departments and IT."
Boero added that in order to further improve the interface between ION and LN, further communication layers or integration are being introduced in order to optimise the communication aspect of the systems. This improved communications component is expected to go live during the latter part of this year.
Sales & Operations Planning
A further key component within LN, implemented during 2014, was Sales & Operations Planning (S&OP). "By adding S&OP we were able to integrate our demand forecasting data with scheduling in order to improve production capacity on the shop floor," Boero explained. "S&OP was another process that we implemented within LN. This enabled us to replace what had previously been substantially manual operations managed by our logistics, commercial and manufacturing departments. The legacy systems comprised a number of spreadsheet-based methodologies. The implementation of S&OP has resulted in faster, more agile decision making within the supply chain planning process."
S&OP provided automated workflows to help Ferrari guarantee the flow of information across demand (from approximately 200 dealers) and supply (into production). "The improved accuracy of data, standardised planning and information flow processes and enhanced functionality of S&OP enables comprehensive tracking of any changes in dealer demand and the subsequent changes to the Ferrari production plan," said Boero. "It also helps to improve governance, the approval process and compliance. As a result, this enables Ferrari to respond quickly to changes and meet customer demand, due to the intelligent business support provided by S&OP."
Computational fluid dynamics
A key IT ingredient that continues to command a dominant place within Ferrari's solutions portfolio is its Ansys computational fluid dynamics (CFD) technology software package. Simulation technology helps Ferrari maintain best-in-class aerodynamic performance. Specifically, Ferrari leverages Ansys software to reduce overall drag, maximise downforce and optimise its complex brake cooling systems, all of which are essential to keeping the car running properly. To this end, Ferrari engineers have extensively automated the simulation process and run many design iterations to improve speed, reliability and safety. And, as Boero explains, Ansys is not only used for the Formula One side of the business; Ferrari's world-class car production also benefits from the state-of-the-art fluid dynamics simulation processes provided by Ansys.
"It's a very reliable and consolidated solution that operates within our test centre 24 hours a day, seven days a week," said Boero. "Nevertheless, we continually look very hard at the market to ensure we are using the very best simulation solution – this is critically important within such a competitive environment as Formula One. That said, we are currently very happy with the results Ansys provides."
Manufacturing Execution System
At the beginning of 2013 a plan was put in place to utilise the same Siemens MES for all the Ferrari production lines, and to have in place one common platform between the ERP and MES systems. "This process hasn't yet been completed as, in a similar fashion to our ERP system, we wanted to implement the MES in stages to ensure it was a perfect fit for each production line," Boero pointed out. "The last remaining stages of implementation will be completed during this year with the replacement of the last two engine production lines – 8 and 12 cylinders – that are still utilising the old MES."
Product Lifecycle Management
Ferrari also sourced the new PLM systems in January 2013 which is Windchill FlexPLM from PTC. Once fully operational, the PTC system will be the main collector of the information and will be the official PLM for Ferrari GT. When two PLM systems are fully integrated Boero believes Ferrari will have a system that is unique in the market. To achieve this, Ferrari has been working with both vendors to fully integrate the two platforms.
The project will keep, in any case, the actual CAD solution for Engine (PTC) and Vehicles (CATIA) with the target to implement, for both solution, the more advanced and updated version (Creo 3.0 and CATIA V6). With this approach, a significant integration with the Enovia V6 layer will be also required; this area is one of the most interesting and advanced that will be managed through the implementation of the PLM.
Boero explained that the core of the integration process took place during September 2015, with the first wave expected to go live during September of this year. This wave will be mainly focused on the R&D Department. The second wave will concentrate more on the virtual simulation, modelling and the first step of integration between the R&D and the other departments in the company; such as manufacturing, logistics and technology. The third and final step will be focused on the commercial integration between R&D and manufacturing and the implementation of the final stage of the unique, integrated BOM for all the departments.
"These are the main steps that we need to go through before full implementation of the PLM," said Boero. "As has been the case with ERP and MES, we do not take a 'big bang' approach to configuration and integration; it's about ensuring that every part of the functionality is optimised for our specific needs. This is why we split the implementation roadmap into three main steps; each with very clear targets and objectives."
Radio Frequency Identification
RFID was also factored into the company's five-year IT plan during 2012. "The implementation of Infor RFID was focused on managing the production of Maserati V6 engines produced on the company's production line introduced in 2012, as well as for related warehouse activities, and went live in February 2013," Boero explained. "Our RFID implementation was related to the second step of the implementation of Infor LN. Over the past three years, our RFID solution has operated very efficiently, with hardly any negative issues at all."
Market focus
In terms of core global markets, Boero points out that Ferrari is currently focusing on over 60 different territories around the world. "The breadth of our global presence and the increasing expectations of our customers in terms of quality product and speed of delivery is why we are introducing major manufacturing and logistics improvements through the implementation of our new IT estate as part of our five-year plan," he said. "In particular, in order to collect orders speedily and deliver goods within a short timeframe to certain markets – particularly those that are not so familiar to us – we need the extra flexibility that the functionality within LN provides us with."
In addition to the functionality roadmap outlined above, Boero explained that Ferrari is also looking to go live with other features within LN by the end of this year; including revenue cycle management. "We expect this to provide us with the extra flexibility and capacity needed to improve business processes that we are currently unable to optimise due to the constraints present within our older applications that are yet to be phased out," he said.
With this in mind, Boero pointed out that there are around 60 custom legacy applications that are due to be phased out by the end of this year, following on from the 20 or so that have already been dismissed since the five-year plan was put in place and since key modules of the new IT systems went live. Then, between 30 and 40 legacy systems will be closed during 2017 and 2018.
Driver
Boero concluded: "This has been a major transition for us, and reflects our commitment to becoming as efficient as possible both businesswise and operationally, reflecting the high esteem our products are held in throughout the world. We owe it to our customers – this is the main driver for us."
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