Transform Supply Chain with SAP

Transcription

1 Transform Supply Chain with SAP The Business Value for Supply Chain with SAP S/4HANA, Cloud/ Line-of-Business Applications and SAP Leonardo

2 SAP Integrated Business Planning (SAP IBP) live at Microsoft Corporation Hear from Microsoft executives on how they are using SAP IBP to realize their Innovation Supply Chain. The solution helps the company build a demanddriven supply chain, that understands and fulfills consumers demand at their request and meets their expectations. 2

3 White Paper Background and Key Definitions The information outlined below will help you understand the contents of this value proposition white paper. It gives details on the objectives and scope of the paper. Key definitions are also provided. DELIVERABLE OBJECTIVE Provides information on the value in moving from an ERP on a traditional database to SAP S/4HANA, Cloud/ Line-of-Business (LoB) applications and SAP Leonardo solutions.. KEYDEFINITIONS Within the process and subprocess deep dives, there is detailed content in table format articulating the following: Typical Pain Points Major customer business and IT challenges. Current State with ERP on Traditional Database ERP capabilities that are available on a traditional database. SAP S/4HANA shipped with the latest release of SAP S/4HANA, including apps that are optimized for SAP Leonardo, such as an app for contract consumption. Business Benefits Key value drivers that are impacted by the adoption of SAP S/4HANA, Cloud/ LoB applications and SAP Leonardo solutions. With the value proposition section, all quantified benefits are conservative, estimated improvement ranges tied to the top value drivers. They are based on early adopters or new developments and enhancements of SAP S/4HANA, Cloud/ LoB applications and SAP Leonardo solutions that can drive value. Keep in mind that these benefits should be used as a guide. We recommend working together to assess your current maturity and the value of moving to SAP S/4HANA, Cloud/ LoB applications and SAP Leonardo solutions to develop a personalized business case. Last Update SAP S/4HANA 1709 release. All Leonardo capabilities are highlighted in bold. Cloud/ LoB and SAP Leonardo Solution Solutions that can be integrated with SAP S/4HANA and provide business value for example, the SAP Integrated Business Planning solution or SAP Connected Goods software. These solutions are not embedded in SAP S/4HANA but these can be integrated. 2018: Planned Innovations* New functionalities planned for the 2018 release of SAP S/4HANA, Cloud/ LoB applications and SAP Leonardo solutions. *Detailed road map available on SAP.com (customer loginrequired) This document and SAP s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, included but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement SAP SAP SE or SE an or SAP an SAP affiliate affiliate company. company. All rights All rights reserved. reserved. ǀ ǀ 3

4 Agenda Supply Chain Overview 5 End-to-End Business Scenarios 8 Process Deep Dive 11 Digital Priorities 21 Value Proposition Summary 22 Customer References 23 Appendix 25 4

5 Supply Chain in a Digital Economy TRANSFORM SUPPLY CHAIN WITH SAP Digitization of the economy is continuing to accelerate the pace of innovation, shortening the product lifecycle and increasing the demand volatility. At the same time supply chains are becoming global and increasingly complex. To be in a position to create and capture opportunities, companies must develop an environment in which they can manage information and processes simultaneously across the extended supply chain. This evolution of supply chains is more connected, intelligent, responsive, and predictive. It enables companies to drive customer-centric processes and deliver personalized products uniquely built and delivered for the segment of one. These demanding customers have to be serviced across a business network of global partners that are increasingly challenged by resource scarcity. This transformation will continue to impact the business processes and systems that are required to remain competitive. It will change how we design, plan, make, ship, and operate our products and assets. SAP S/4HANA Supply Chain, cloud applications such as SAP Ariba solutions and SAP Integrated Business Planning, and SAP Leonardo support a digital supply chain strategy with a digital value network that acts as an enabler for business transformation. The digital value network starts with a digital core that interconnects all aspects of the value network in real time to drive business outcomes. The digital core not only connects every aspect of internal operations but also enables real-time workforce engagement, supplier collaboration, outcome-based omnichannel consumer experience, and other market dynamics with Internet of Things (IoT) and Big Data scenarios. Prestige Brands Prestige Brands Implemented the SAP Integrated Business Planning Solution to support account planning With SAP Integrated Business Planning, our sales VP can do annual sales quota planning in a few hours compared to days. All sales team members can collaborate and achieve consensus sales forecast numbers centrally and provide visibility to the management team instantaneously. Bizbrain Technologies delivered this project, from concept to going live, in 12 weeks. This is a very fast ROI. Matt Flood, Vice-President and CIO, Prestige Brands Holdings Inc. Gulftainer Gulftainer Implemented SAP S/4HANA to meet its current and future requirements Predictive Forecasting and Demand Sensing Short-term demand prediction with demand sensing algorithms. Remote capture and analysis of sensor data from connected devices and feeding to demand management process. Demand Driven Material Requirement Planning (DDMRP) Dynamic planning of replenishments with DDMRP which is fully integrated into existing MRP concept. Replenishment only for real demand and introduction of buffers at strategically important points. Live Inventory Management Live inventory management enabling unlimited simultaneous material movements and allowing for true transparency on inventory and material flows. Decreased stock buffers due to better transparency and insights. Warehousing and Transportation on One Platform Single warehousing platform for all warehousing operations, including optimization, automation, and labor management. Single transportation platform with basic and advanced shipping functionality and real-time embedded analytics. At Gulftainer, we are committed to providing the highest standards of operational efficiency. SAP S/4HANA will enable a more efficient, costeffective movement of international business through our terminals, providing the actionable data necessary to increase productivity and reduce costs. Ramesh Shivakumaran, Group Director Business Services, Gulftainer Company Limited 5

6 SAP SUPPLY CHAIN VALUE PROPOSITION SUMMARY SAP solutions enable companies to substantially enhance, simplify, and visualize the entire supply chain process. Reduced Days in Inventory with Live Inventory Management and Demand Driven MRP (DDMRP) Live inventory management through a redesigned data model enables unlimited simultaneous material movements and allows for true transparency on inventory and material flows. It also provides improved material planning with faster, more frequent Material Requirement Planning (MRP) runs multiple times a day, with planning and rapid replanning in minutes instead of hours to minimize inventory. It is now possible to replenish only for real demand and introduce buffers at strategically important points (Demand Driven Material Requirement Planning - DDMRP). Reduction in Revenue Loss Due to Fulfillment Issues with Advanced Available to Promise (AATP) The solution enables intelligent, real-time product availability check for sales, planned and production orders. It includes scalable Available to Promise (ATP) for managing large transaction volumes and flexible allocation management capabilities. It provides back-order processing with intuitive priority classification and interactive exception handling. Improved Supply Chain Planning FTE Productivity with SAP Integrated Business Planning and SAP Fiori Supply chain planning productivity is enhanced through easy-touse Microsoft Excel and analytics-based planning interfaces in conjunction with SAP Integrated Business Planning (IBP). This helps production and material planners execute critical daily tasks with embedded decision support analytics and SAP Fiori role-based user interface applications. Reduced TCO Through Landscape Simplification with Embedded Solutions in SAP S/4HANA Faster business outcomes are achieved with reduced operational cost, thanks to simplified system landscapes. Redesigned data structure and embedded solutions in SAP S/4HANA result in fewer systems and interfaces. For example - SAP Extended Warehouse Management (SAP EWM) and SAP Transportation Management (SAP TM) applications embedded in the SAP S/4HANA core. Reduce Overall Supply Chain Planning Cost with What-If and Scenario Planning S/4HANA digital core in conjunction with SAP Integrated Business Planning for sales and operations enables integrated, continuous and iterative supply chain planning. It includes whatif and scenario planning to react to market demand through the best service at lowest cost. Manufacturing costs and premium freight expenses are reduced with detailed constrained planning and scheduling, enabling agility and efficient use of capacity SAP SAP SE or SE an or SAP an SAP affiliate affiliate company. company. All rights All rights reserved. reserved. ǀ ǀ 6

7 SAP s Digital Business Framework for Supply Chain SAP solutions enable organizations to drive business value across their end-to-end digital value chain. SUPPLIER COLLABORATION WORKFORCE ENGAGEMENT S/4HANA DIGITAL CORE ASSETS AND SUPPLY CHAIN CUSTOMER EXPERIENCE SAP Ariba Solutions for Direct Spend SAP Ariba Supply Chain Collaboration SAP Ariba Strategic Sourcing Suite SAP Ariba Supply Chain Mobile App Ariba Network (integrating the entire buying process for the organization) SAP Integrated Business Planning (IBP) SAP Fieldglass solutions SAP SuccessFactors solutions Extended Warehouse Management Transportation Management Extended Production Scheduling and Delivery Planning Advanced Inventory Management SAP Integrated Business Planning (IBP) IBP for Response and Supply IBP for S&OP (Sales and Operations Planning) IBP for Inventory Supply Chain Control Tower SAP Leonardo SAP Vehicle Insights SAP Asset Intelligence Network SAP Global Track and Trace SAP Hybris Cloud for Sales SAP Integrated Business Planning (IBP) IBP for Demand SAP Leonardo SAP Connected Goods IBP for Response and Supply SAP Predictive Maintenance 7

8 End-to-End Business Scenarios Some organizations measure value by the impact to their end to end processes. Outlined below are the primary end-to-end processes that are important to a supply chain organization. 1. PLAN TO POSITION Plan to Position is an end-to-end supply chain planning scenario which relates to production, procurement and positioning the product in the supply chain in anticipation of demand. The scenario starts with setting business objectives and includes the tactical and operational decisions to set the demand plan, capacities and inventory targets. 2. ORDER TO DELIVERY Order to Delivery is an end-to-end supply chain planning and execution scenario which relates to efficient order fulfillment and delivery. The scenario starts with capturing a sales order and includes order confirmation, material requirement planning, production, procurement and ends with material dispatch. 8

9 Reimagine Plan to Position Traditional Planning Sales & Operations Planning Demand Planning Supply Planning Manual Adjustment Alignment between sales plan and capacity plan excluding inventory targets Limited financial alignment with business plan Classical statistical forecasting and consensus demand planning process based on historical data, often leading to unsatisfactory accuracy Propagation of supply requirements through company s network with limited consideration of business priorities and no connection to fulfillment planning Use of s, phone calls, and spreadsheets to resolve issues when there is a supply disruption or a demand change to determine how to respond The New World With SAP Integrated Business Planning Demand Planning & Sensing Response & Supply Planning Scenario Planning & collaboration Holistic alignment to business plan including financials and inventory target setting, supported by internal collaboration Demand plans consider demand signals from orders, shelf, and web with intelligent adjustments to eliminate bias and determine optimum forecast parameters Finite planning based on optimization or business priority rules, coordinated electronically with trading partners, with full pegging visibility and generation of allocation plans to govern order promising Full visibility to demand and supply across the extended network, to simulate changes to plan, with root cause analysis to understand and resolve issues TOP VALUE DRIVERS Reduce Supply Chain Planning Cost Increase Forecast Accuracy Reduce Revenue Loss due to Fulfillment Issues 9

10 Reimagine Order to Delivery Traditional Planning Sales Order Capture Sales order confirmation Scheduled MRP Purchase Requisitioning/ Production Inventory Management Outbound Delivery, Transport Planning & Dispatch In-Transit tracking Delivery commitments based on outdated data, resulting in cancelled or delayed orders The New World With SAP No ability to re-run MRP during the day. Material shortages not known instantly, delaying production No way of knowing if a reliable supplier nearby could have delivered the missing part in time Delayed material postings due to high volume of production transactions. Inability to respond to production issues on time Increased safety buffers to make up for the lack of inventory invisibility, locking up capital Interface needed between ERP and extended warehouse management application Transportation process taking place in disparate systems with inefficient business partner collaboration Limited optimization possibilities No out of the box event tracking capabilities Analytics and reporting done in a separate business warehousing system with no real time data update Sales order Capture Online Order Confirmation Live MRP Purchase Requisitioning / Production Inventory Management Outbound Delivery, Transport Planning & Dispatch In-Transit tracking Up-to-date inventory information resulting in realistic fulfillment commitments. Rulebased product allocations MRP runs possible multiple times a day. Material shortages identified instantly Automated decision recommendations and integrations in to Ariba network quickly locates the best supplier Minimized safety stock with just-in-time material availability Minimized safety stock with just-in-time material availability Single warehousing platform for all warehousing operations Single platform for transportation management with realtime embedded analytics Capacity management, planning, collaboration execution, charge management and settlement in one system Insights in to transportation execution, tracking goods and assets in transit (SAP Global track and Trace) Analyze vehicle and sensor data in real time, optimizing logistics and improving service ( SAP Vehicle Insights) TOP VALUE DRIVERS Improve Customer Service Reduce Inventory Carrying Cost Reduce Logistics Cost 10

11 SUPPLY CHAIN MANAGEMENT (SCM) CAPABILITIES Outlined below are the primary capabilities for SCM where value can be achieved through SAP S/4HANA, Cloud/ LoB applications and SAP Leonardo solutions. Digital Business Planning Digital Logistics and Order Fulfillment Demand Management and Insights Sales, Inventory and Operations Planning Response and Supply Management Warehouse Management Transportation Management Logistics Network SAP SAP SE or SE an or SAP an SAP affiliate affiliate company. company. All rights All rights reserved. reserved. ǀ ǀ 11

12 Digital Business Planning Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Inability to include real-time, changing demands in the planning run leads to outdated and inaccurate planning Basic demand planning features exist with limited ability to sense or predict short-term demand based on growing number of demand signals Provides a real-time order management platform for omnichannel demand management Changes in demand are visible without waiting for lengthy batch processes. Orders are prioritized and tightly integrated with supply and fulfillment Short-term demand prediction with demand sensing algorithms and forecasts for medium to long-term demand with advanced statistical forecasting methods (SAP Integrated Business Planning) Product lifecycle management tools for generating statistical forecasts on new products (SAP Integrated Business Planning) Remote capture and analysis of sensor data from connected devices, feeding to demand management process (SAP Connected Goods) Enhanced demand management process including product lifecycle management and product segmentation capabilities (SAP Integrated Business Planning) Operational master data and order data integration with transactional system (SAP Integrated Business Planning) Increased forecast accuracy Reduced demand planning and forecasting cost Difficult to drive Sales and Operations Planning (S&OP) process with executional ERP system, which causes planning to be done in a slow, manual process with inconsistent information across functional areas Collaboration around a sales and operations plan needs separate integration; difficult to analyze different scenarios of future demand and supply and hard to come up with actionable plan Provides an integrated SAP HANA platform to support demand-driven business planning processes, including real-time analytics across demand, supply, and finance Rapid and collaborative S&OP, including what if and scenario planning of different potential business plans, to allow business stakeholders and functional leaders to agree on and execute desired path forward (SAP Integrated Business Planning) Workflow and approval process as part of the sales and operations process (SAP Integrated Business Planning) Reduced overall supply chain planning cost Reduced sales and operations planning cycle time (continued next page) 12

13 Digital Business Planning Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution capabilities 2018 Planned Innovations Business Benefits Long batch run processes lead to inefficient planning Manual resolution on material bottlenecks, heavy use of side by side tools to simulate Inability to include the real-time changing demands in the planning run and analysis leads to outdated and inaccurate planning decisions Planning runs at predefined times without real-time data MRP lists are working with snapshots of the planning situation during the planning run Accelerated MRP: improved effectiveness of planning, up to 10x faster, enabling more frequent MRP runs multiple times a day (Live) MRP: one single harmonized MRP process for all materials, both unconstrained and those requiring advanced constraintbased planning MRP (cockpit) provides real-time insights into material availability Supply planning beyond MRP in conjunction with S&OP to provide unconstrained or constrained (optimized) supply plans (SAP Integrated Business Planning) Rapid and collaborative S&OP, including what if and scenario planning (SAP Integrated Business Planning) Improved usability with new MRP planning board and (near) realtime integration with SAP Integrated Business Planning Reduced overall supply chain planning cost Improved manufacturing function planning efficiency Reduced revenue loss due to stockouts Improved manufacturing function planning efficiency Inability to support demand driven supply chain. Individual and siloed solutions for demand generation and supplier collaboration leads to inefficient supply chain processes Forecast is generated in a separate system and there is no direct communication to the suppliers on the same Directly share forecast and orders generated by SAP IBP (Integrated Business Planning) with suppliers via Ariba Supply Chain Collaboration (SCC) solutions Reduce revenue loss due to fulfillment issues Reduced overall supply chain planning cost (continued next page) 13

14 Digital Business Planning Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Too much working capital in the supply chain leading to low inventory turns and, at times, subpar customer service levels Whiplash effect in which forecast yield supply chain inefficiencies Difficult to predict individual consumer demand and supply the same, without increasing the stock Difficult to determine optimal inventory targets across the supply chain, so companies are left with having to estimate these manually Personalized and dynamic planning of replenishments with Demand Driven Material Requirement Planning (DDMRP), which is fully integrated into existing MRP concept Replenish only for real demand and introduce buffers at strategically important points (DDMRP) Real-time analytics across all data held in SAP S/4HANA, covering orders, invoices, inventory, and costing information Determination of optimal inventory targets across multiple echelons of raw material, work in process, and finished goods inventory, enabling supply chain to operate with less working capital while maintaining target service levels (SAP Integrated Business Planning) Uncertainty index and expected service-level calculation for inventory optimization (SAP Integrated Business Planning) Demand driven replenishment: Time dependent buffer levels, Buffer monitoring in planning and execution Reduced days in inventory Increased inventory accuracy Lack of visibility into the end-to-end supply chain leads to poor decision support and slow corrective actions Supply chain analytics possible using an online analytical processing (OLAP) engine like business warehouse (BW); the data is not real time Embedded analytics allow onthe-fly simulations with real-time data; user- and use-case-centric views are also supported Empowersbusiness users to perform ad hoc analysis in real time with alerts, KPIs, reporting, and insights that detect and notify users of potential disruptions (SAP Integrated Business Planning) Enhanced process visualization, automation, and collaboration, including work flow and approval process Collaborative planning on the network with SAP Integrated Business Planning and the Ariba Network Improved supply chain planning FTE productivity Reducedoverall supply chain planning cost 14

15 Digital Logistics & Order Fulfillment Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Missing visibility and control of material movements across the network Batch-based processes and lack of real-time monitoring result in poor on-time delivery performance IT complexity with the need to maintain interfaces Data duplication due to separate warehousing systems, adding to complexity Visibility on overall progress across system boundaries; ability to achieve overview on material flows messaging interface between ERP and extended warehouse management application Limited wave management and warehouse optimization capabilities Limited capabilities in the area of cross docking, labor management, quality management No standard UI capabilities for end to end user experience Single warehousing platform for all warehousing operations, including optimization, automation, and labor management. This is enabled by SAP Extended Warehouse Management (EWM) embedded in the SAP S/4HANA core Mapping the entire warehouse complex in detail in the system, down to storage bin level with real time visibility of labor, resources and activities, using warehouse monitor One system (master data, customizing, and UX) for reduced data redundancy, lean processes with fewer business documents, and overall simplification New and improved FIORI apps available for warehousing clerks SAP EWM deployed as a stand-alone application for highvolume and highly automated warehouses Improved user experience with new SAP Fiori apps related to task confirming, inventory counting, outbound packing and e-commerce returns Advanced QM Integration Additional embedded analytics for EWM in the area of labor management reporting Improved integration to inventory management related to customerowned stock and separation of storage location assignments Comprehensive integration of item unique identification data and ammunition management in the area of defense Stock in Transit: Mitigate production risks by forecasting stock in transit delays Reduced total logistics cost Reduced warehouse operating cost Increased inventory accuracy Reduced order fulfillment lead time Reduced TCO through landscape simplification (continued next page) 15

16 Digital Logistics & Order Fulfillment Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Lack of accurate up-to-date inventory data, lead times, and procurement timings for the planning leads to an inefficient planning process Low inventory throughput prevents live inventory updates Inventory status is calculated overnight Live inventory updates are not available; inventory status is reflected in the system with timeoffset Inventory throughput may reach boundaries depending on business scenario Live inventory management through redesigned data model enables unlimited simultaneous material movements and allows for true transparency on inventory and material flows Ability to change lot size to one, thus capturing the lowest level of granularity in inventory stock keeping Decreased stock buffers due to better transparency and insights Catch Weight Management (CWM) and Direct Store Delivery ( DSD) functionalities for the customers Enhancements for predictive analytics in process monitoring for decision support Improvements in goods receipt process and usability through posting of goods receipts without reference Process enablement for further Catch Weight Management (CWM) scenarios Reduced supply and inventory planning cost Increasedinventory accuracy Reduced days in inventory Availability of goods receipt including stock in transit and goods receipt of blocked stock (continued next page) 16

17 Digital Logistics & Order Fulfillment Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Complexity in valuating inventories in multiple currencies and for different valuation methods (legal/ profit center/reportin g purposes) Material ledger activation available along with functionality of actual costing. However, inventory valuation data exists in multiple aggregated tables, which leads to slow processes (actual costing, redistribution/ revaluation) and slow/inefficient reporting Material ledger available as a default option. All inventory valuation data exists in material ledger, removing redundancies and aggregates Faster actual costing due to optimizedcode based on SAP HANA; faster reporting as needed for actual costing; multiple currency and multiple valuationmethods Increased inventory accuracy Increased visibility in actual profitability, allowing for margin optimization Limited inventory visibility, increasing error rate, and supply shortages Inventory analysis is possible through a separate analytical system with data integration issues and data latency SAP Fiori apps for inventory managers and warehouse clerks Optimization of inventory and material flows with analytical apps, to include inventory turnover analysis and flow analysis Inventory KPI analysis with follow-up actions on slow- moving materials New analytical apps for warehouse clerks and inventory managers Overview page to support the inventory analyst in daily business by presenting selected and relevant KPIs and charts at a glance Increased inventory accuracy Reduced supply and inventory planning cost (continued next page) 17

18 Digital Logistics & Order Fulfillment Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Managing increasingly complex, multi modal, global transportation needs in a single platform Manual transportation process taking place in disparate systems with inefficient business partner collaboration Lack of end to end visibility with electronic track and trace capabilities No holistic optimization of inbound, outbound and intracompany freight Limited optimization possibilities - No planning combining inbound and outbound movements - Planning based on deliveries - No transportation capacity planning No comprehensive freight agreement management and settlement capabilities with customers and suppliers Limited tendering capabilities No out of the box event tracking capabilities Single platform for transportation management with basic and advanced shipping functionality and real-time embedded analytics. This is enabled by SAP Transportation Management (TM) embedded in the SAP S/4HANA core Transportation solution covering end to end processes - capacity management, planning, collaboration execution, transportation charge management and settlement in one system Address requirements of multiple industries and modes Accurate transportation costing for improved invoice accuracy The SAP Transportation Management (SAP TM) deployed as a standalone application for complex transportation requirements Insights into transportation execution, timely execution of critical business processes and tracking goods and assets in transit (SAP Global track and Trace) Collect, map, store, and analyze vehicle and sensor data in real time, optimizing logistics and improving services (SAP Vehicle Insights) Advanced driver planning Integration to global track and trace Estimated Time of Arrival (ETA) calculation based on actual data Collaboration through logistics business network Migration tools for SAP TM to SAP S/4HANA for TM Reduced total logistics cost Reduced transportation management costs Increased inventory accuracy Reduced order fulfillment lead time Reduced TCO through landscape simplification (continued next page) 18

19 Digital Logistics & Order Fulfillment Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Logistics processes done in disparate systems without comprehensive integration into core business processes IT complexity with the need to build multiple interfaces Analytics and reporting done in a separate business warehousing system with no real time data update Lack of visibility and automation in yard management processes leading to inefficiencies Embedded Logistics Execution Warehouse Management (LE- WM) and Logistics Execution Transportation management (LE- TRA) components only offer limited functionality with need to setup multiple Interfaces with business suite applications Reporting based on Business Warehousing (BW) content using Business Intelligence (BI) reporting tools with time lag from transaction system Visibility into the location and condition of goods and assets along the supply chain Process transparency and collaboration with the partners to identify and address issues with in-transit tracking Valuable insights to make focused decisions to lower costs and optimize inventory levels Enable collaboration with logistics partners to improve throughput, reduce wait times, and increase efficiencies (SAP Global Track and Trace) Full visibility into the lifecycle of serialized products and tracking products across multiple systems (SAP Global Track and Trace) Efficient management of yard activities such as managing stock, locations and vehicles (SAP Yard Logistics) Collect, map, store, and analyze vehicle and sensor data in real time, optimizing logistics and improving services ( SAP Vehicle Insights) Unplanned returns process triggered from SAP Extended Warehouse Management (EWM) Analytics for delivery performance Intuitive forward navigation in order to achieve routine and exceptional task Improve on-time delivery performance Reduce days in inventory Improve customer satisfaction Reduce total logistics cost Reduce operations cost (Services) Limited transparency in multi tiered global supply chain network, with multiple business partners (continued next page) 19

20 Digital Logistics & Order Fulfillment Deep Dive TYPICAL PAIN POINTS Current State with ERP on Traditional Database SAP S/4HANA Cloud/ LoB and SAP Leonardo Solution 2018 Planned Innovations Business Benefits Inability to promise accurate and reliable order dates leads to customer dissatisfaction and revenue loss Inefficient strategies or manual processes to manage orders and allocations lead to revenue loss and fulfillment issues Inability to select alternative sources intelligently impacts profitability targets Global ATP checks in a different planning system Low-volume backorder processing supported Mass product availability check for sales, planned and production orders. Advanced ATP check and performance improvements for releasing large production orders Multichannel allocation management using demand characteristics to allocate and reserve short supply. Real-time order confirmation considering allocation constraints Back-order processing with intuitive selection and ranking of demand to establish order priorities. Rescheduling order confirmations interactively to manage variability through out the day Improved user productivity with SAP Fiori apps including: back-order processing setup and result monitor and last-minute changes before release for delivery Response planning capability for midterm allocation planning and short-term order confirmation in order to automate allocation procedures, take effective corrective action and respond rapidly (SAP Integrated Business Planning) Display and analyze confirmation situation of requirements and product allocation availability situation Trigger an alternate backorder processing run automatically when an exception occurs Alternative-based confirmation: automatically determine the best possible plant to fulfill a requirement Reduction in revenue loss due to fulfillment issues Reduction in cancellations of back-ordered items 20

21 Digital Priorities in Supply Chain Major shifts in the economy are accelerating the transformation to a Digital Supply Chain. These evolved supply chains are more connected, intelligent, responsive, and predictive. Below are few digital priorities that will help companies to capture the opportunities and remain competitive. Customer Experience Local Manufacturing Customer expectations are changing and individualized products are becoming commonplace. It s not about selling the product but caring about the customer from the beginning through the entire lifecycle. Ability to deliver the same day, or even the same hour to different types of locations is the key to a great customer experience. SAP Connected Goods software captures information from smart products using IoT sensors. SAP S/4HANA supports the new consumption-based business models, leading to increased revenue for the organization. Companies are moving closer to home and reducing outsourced manufacturing with the preference of local manufacturing. To make manufacturing processes more efficient and affordable there is an increase in automation and robotics on the production floor. Also, the assets and products are becoming more connected and smarter. SAP S/4HANA supports agile manufacturing with lot size of one and 3D Printing customization capabilities, which reduces inventory carrying costs. SAP solutions provide better visibility into the performance of the shop floor equipment to increase uptime and utilization. Networked Economy Changing Society The new economy is the networked economy. Organizations are seeking cross department and cross industry business network collaboration. Also, visibility down multiple levels of a supply chain is needed for sustainable and socially responsible networks. SAP Integrated Business Planning and SAP Ariba solutions provide collaboration across supply chain, logistics, assets, and manufacturing. IoT solutions from SAP leverage data from smart assets to drive data and business processes. Also, improved collaboration in design results in improved compliance and sustainable products. An increasing percentage of the world s population now lives in cities and urban areas. This increases the pressure on infrastructures such as electricity, water, and power grids and thus the need to optimize space and logistics. Also, as manufacturing becomes more automated, the role of employees and the skills required are also evolving. IoT solutions from SAP help build smart cities and optimize the rural areas to support the ever-growing population with the ever-decreasing natural resources. SAP Leonardo capabilities help data scientists analyze vast amounts of data and provide innovative solutions in this time of changing work environments and populations. 21

22 SAP s Value Proposition for Supply Chain STRATEGYENABLEMENT BUSINESS BENEFITS* Run Simple (master complexity): adapt to market opportunities and develop newchannels Integrate planning and execution across strategic, tactical, and operational time horizons Strategy Enablement Business Benefits 12 15% reduction in days of inventory 10 15% reduction in revenue loss due to stock-outs 10 15% reduction in total logistics cost 5 10% reduction in supply chain planning cost Reduction in order fulfillment lead time RISK MANAGEMENT Risk Management Employee Engagement EMPLOYEE ENGAGEMENT Plan risk as part of a structured, collaborative, integrated business planning process Enhances supply chain planning productivity through easy-to-use Microsoft Excel and analytics-based planning interface Accelerate planning and response cycle times, moving from monthly, to weekly, to daily decision processes Adopt short-term demand sensing and supply replanning to respond to variability Helps production and material planners execute critical daily tasks with embedded decision support analytics and the role-based SAP Fiori user experience Increases throughput *Benefits are based on early adopters of SAP or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA, Cloud/ LoB applicationsand SAP Leonardo solutions. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise. 22

23 Customers are Achieving Value from SAP PRESTIGE BRANDS HOLDINGS Inc. Decreased time for report generation from 2 days to minutes Reduced time for sales quota planning from 4 weeks to 3 hours Achieved greater acceptance, trust, and compliance across all organizational units Prestige Brands focuses on product innovation in the over-thecounter healthcare and household products, It implemented SAP Integrated Business Planning Solution to support account planning. The centralized tool provided what-if scenario analysis to evaluate different plans with visibility into immediate impact on customer service and working capital investments Company Prestige Brands Holdings Inc. Industry Consumer Products SAP Solution SAP Integrated Business Planning Customer Web Site Click here for Prestige Brands Holding Inc. source reference LOHIYA GROUP 100% Visibility of inventory across all locations 70% Less time spent on decision making 60% Faster transaction processing time Lohiya Group offers a range of products for consumption for the domestic and commercial sectors throughout India. It implemented SAP S/4HANA to automate freight determination based on customer region from point of delivery, as well as to track orders and pricing. The company also expects to eliminate the need for reconciliation between warehouse and accounts, thanks to fully integrated inventory and accounting transactions. Company Lohiya Group Industry Consumer Products SAP Solution SAP S/4HANA CustomerWeb Site Click here for Lohiya Group source reference 23

24 Customers are Achieving Value from SAP FARMA-TEK 3-day Order fulfillment, down from 8 days 40% Reduction of capital tied up in stock 40% Reduction in waste due to FEFO (First Expired-First Out) methodology Farma-Tek, a pharmaceutical company based in Istabnul, aspires to introduce new products to healthcare professionals. SAP S/4HANA runs all of the company s business processes on a single platform. Real-time insight suppots Farma-Tek in predicting the flow of materials to produce the right products at the right time. It also assists the company in regulatory compliance tracking an imperative in this industry Company Farma-tek Industry Pharmaceutical SAP Solution SAP S/4HANA Customer Web Site Click here for Farma-tek source reference GULFTAINER COMPANY LIMITED Improved operational efficiency Agile solution to support enterprise mobility and on-the-go business Scalable foundation to support future growth Gulftainer is a privately owned, independent port management and 3PL logistics company based in United Arab Emirates (UAE). SAP S/4HANA is expected to enable a more efficient, cost-effective movement of international business through their terminals, providing the actionable data necessary to increase productivity and reduce costs Company Gulftainer Industry Travel and transportation SAP Solution SAP S/4HANA Customer Web site Click here for Gulftainer source reference 24

25 Your Path to Digital Transformation Every enterprise is unique, with different starting points and end points. Whether you are starting as a net-new implementation or undergoing a digital transformation in an existing SAP landscape, SAP can help. We have been working with enterprises of all sizes and n all industries. Based on the depth of this experience, SAP has a robust portfolio of services Customer Engagement Methodology No matter which path applies to your enterprise, SAP has a structured fourphase approach to ensure success executive alignment, value discovery, validation and executive readiness, and value delivery. For more details, please see the brochure: Driving Value in a Digital Economy SAP Value Assurance Service Packages Take advantage of SAP Value Assurance service packages for SAP S/4HANA to quickly and safely harness the power of next-generation software and in-memory processing. For all value assurance packages and for the successful and seamless transition to SAP S/4HANA, please visit the link: Transition to SAP S/4HANA. SAP S/4HANA Road Map With a three-year detailed road map, SAP gives customers the transparency to accelerate their transition to an SAP S/4HANA landscape. SAP S/4HANA Road Map. Start Today with a Trial SAP S/4HANA Trials Innovate with SAP Leonardo SAP Leonardo is SAP s digital innovation system that makes it easy to innovate with new technologies, integrate them into your business, and scale seamlessly as your company grows. Get started today with SAP Leonardo Explore SAP Leonardo capabilities Learn more about SAP Leonardo capabilities and see how customers in a variety of industries are using the system to realize the promise of new technologies, such as the IoT and Big Data analytics. For more details, please see the e-book: Leonardo customer stories Get an Expert Take on Digital Transformation What are the benefits of blockchain, machine learning, and other transformational technologies and how are they impacting business? Get answers from experts and analysts in this e-book Assess Your Supply Chain Digital Maturity Want to understand your Supply Chain digital maturity? Click here to participate and see how you compare to peers in real time. Lay the Foundation for an In-depth Digital Transformation Engagement Key Assets for Next Steps on SAP S/4HANA Get clear guidance on SAP S/4HANA centric product map through a free self-service for customers and partners. 25

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