SAP Executive Briefing SAP and TriMark Reimagining Wholesale Distribution in a Digital World
Today s Menu Introduction COCKTAIL HOUR 9:00 am 10:10 am A Taste of the SAP Experience SAP Overview: Paul Pretko, Senior Principal, Wholesale Distribution User Experience: Sarah Lavelle, Solution Engineer FIRST COURSE 10:10 am 11:10 am Order Entry: Sarah Lavelle, Solution Engineer BREAK SECOND COURSE 11:20 am 12:15 pm Construction Project : Michael Marcotte, Solution Engineer LUNCH 12:15 pm 1:00 pm THIRD COURSE 1:00 pm 1:40 pm Warehouse : Joe Kraszewski, Solution Engineer FOURTH COURSE 1:40 pm 3:30 pm Rebates (with a 10 minute break): Kiel Ochalek, Solution Engineer With over 5.5 million employees in the US, the wholesale distribution industry accounts for nearly 1 out of every 25 jobs. Driven by online sales and an improving economy, 39 percent of distributors describe themselves as thriving. This thriving wholesale distribution industry is trying to continually reinvent itself in order to sustain this growth. Revenue growth opportunities have pushed distributors to fundamentally reevaluate their value proposition and business models. This reinvention is enabled by innovative technology. The National Association of Wholesale-Distributors reports that one out of five distributors plan increase their investment in information technology in order to take advantage of: Advanced Analytics Leading distributors will continuously refine their product and services offerings based on insights developed through in-memory analytics. E-commerce Leading distributors will integrate their go-to-market channels into a seamless, interactive, and customizable experience. New Value Chain Role Enabled by ERP Leading distributors will evolve and mature, creating new customer and supplier touch points, new sources of insight, and new business model opportunities for engagement. DESSERT 3:30 pm 4:40 pm Customer Engagement CRM: Dennis Ruffing, Solution Engineer E-Commerce: Heejin Cho, Solution Engineer 3
Executive Summary The Current Market Trends Our Understanding The Wholesale Distribution Industry faces an unprecedented number of change drivers, as well as an accelerated pace of evolution. Among the more influential factors driving change are continued industry consolidation, new competitive market channels, and supplier disintermediation. In addition to this change is the challenge of reacting to it in a dynamic environment laced with complexity, volatility, and uncertainty that characterizes the wholesale distribution business and technology landscape. The Challenges Technology advancements, the connected the world, and the ongoing need for business insights have challenged the way TriMark must operate to grow profitably. Consolidation is now exerting a broader influence that extends into areas such as new value-added services, higher core service expectations, and information sharing. 29% of distributors will start using new business optimization systems by 2017. Shaped by innovations in e-commerce, distributors are challenged to connect, collaborate, create, transact, and differentiate with partners. 34% of distributors will start using a new e-commerce systems by 2017. The adoption and evolution of analytics continues in areas such as price optimization, understanding cost-toserve, and assessing sales force productivity. 33% of distributors will start using a new profitability analytics tools by 2017. The SAP Solutions SAP for Wholesale Distribution supports TriMark s digital demands of real-time responsiveness, an intuitive user interface, new information sources and the rich analytics required for traditional distributors to evolve to innovative distributors. The SAP in-memory platform has allowed us to rapidly develop digital world solutions for rich customer and supplier engagement with powerful analytics. Distributors no longer look at SAP as a project, but rather a journey to operational excellence and profitable growth. Much like TriMark, they want lay a new technology foundation with the SAP ERP, followed by extending the solution with SAP e-commerce and business intelligence solutions. Innovative distributors are also leveraging the SAP in-memory analytics and mobility platforms to differentiate themselves from traditional and new competitors. Why SAP? SAP is prepared to work with TriMark on the development of a technology strategy to start your SAP journey. We welcome the opportunity to help you reimagine wholesale distribution in a digital world with solutions that are: Wholesale Distribution industry specific Flexible to adjust to new business strategies Natively integrated yet open to non-sap systems Innovative and simple solutions Proven and safe for a thin margin industry The Wholesale Distribution Industry is evolving in a digital world: Traditional Distributors 1. Revenue driven 2. Organization redundancies 3. Customary product based 4. Multiple touch points 5. Slow to react Limited by multiple aging technologies to support business growth Innovative Distributors 1. Margin managed 2. Shared services 3. New sibling products and services 4. One face to the customer 5. Real time decisions Use integrated and simplified technology to enable strategic initiatives 5
SAP for Wholesale Distribution Value Map Challenges in Wholesale Distribution Fuel Profitable Growth in Wholesale Distributors Leading wholesale distribution organizations must rise to meet the following challenges and streamline their operations, while continuing to innovate. Opportunity to Cash Agile Marketing Procuret op ay Business Network for Supplier Collaboration Supply Chain Planning and Execution Sales, Inventory, and Operations Planning and Cost-to-Serve Opportunity to Cash Procure to Pay Suppliers Human Resources Finance Information Technology Technology and Platform Customers Supply Chain Planning and Execution Profitability Optimization Opportunity to cash: Distributors are challenged to manage customer relationships and collaboration, process multichannel orders, and streamline billing and collection. Managing pricing is difficult and errors are common. Procure to pay: Procurement is manual, error-prone, slow and costly. Distributors must balance inventory on hand, manage access to supplier inventories, and consider variable costs and availability. Supply chain planning and execution: Cost management of a global network of suppliers, warehouses, and customer locations is complex. Poor forecasting and planning leads to a sub-optimal product mix and poor service. Profitability optimization: Vendor cost recovery is complex and error rates are high with frequent failure to recover all the money that is due. Lack of visibility into procurement spending, supplier performance, and cost to serve affects service levels. Human Resources and finance: Need for effective and efficient human capital and financial management, from recruiting to compensation, and accounting to controlling. Technology and platform: Gain real-time understanding of the business through agile visualizations that enable intuitive exploration of all types and sizes of data. Apply advanced customer stratification and predictive analytics to information to confidently anticipate and guide better decision making. Collaborative Quote to Cash Service Process and Operations Excellence Human Resources Finance Information Technology E-Commerce Technology & Platform Core Human Resources and Payroll Financial Planning and Analysis Application Lifecycle Big Data Real-Time Enterprise Strategic Sourcing and Supplier Procure to Pay Talent Accounting and Financial Close IT Infrastructure Real-Time Analytics Treasury and Financial Risk Enterprise Mobility Transportation Warehouse Supply Chain Monitoring Time and Attendance IT Portfolio and Project Collaborative Financial Operations Enterprise Information IT Service Enterprise Risk and Compliance Application Integration Procurement Insight Supply Chain Optimization Cost Recovery and Rebates General Trading IT Strategy & Governance Cloud Solutions 7
SAP for Wholesale Distribution Transformation Journey Innovative Technology SAP is Aligned to TriMark s Objectives Standardized Foundation Extended Solutions Differentiate Transform TriMark s Transformation Agenda SAP Solution Capability Simplify and Standardize 1 Opportunity to Cash Increase Operational Efficiency 2 Procure to Pay Introduction of SAP applications and analytics to build a standardized foundation to reduce risk during business growth Build on and optimize your baseline SAP solutions and extend the coverage for business performance acceleration Differentiate your business by utilizing new technologies to provide superior information and value added services Become a thought and transformation leader by leveraging innovative process and models for the customers in your industry Modernized enterprise resource planning with 21st century platform 3 4 Supply Chain Planning and Execution Profitability Optimization Position for Future Growth 9
1 2 3 4 1 2 3 4 Opportunity to Cash Procure to Pay With SAP, TriMark can better manage customer relationships, process multichannel orders, collaborate with customers to optimize inventory, and streamline billing and collection activities. To meet customer demand, TriMark must balance inventory on hand, manage access to supplier inventories, and consider variable costs and availability. Best-run companies align with suppliers to mitigate risk and manage the cost of goods sold. Solution Capabilities Benefits Solution Capabilities Benefits Customers are highly informed on price, quality, and availability. SAP can help TriMark become a more customer-centric company and offer new value-added services such as: Sales Order Solution Sales Configuration Pricing Availability Check Credit Check Invoice Commissions E-Commerce Promotions Facilitate the use of profitable multi-channel sales management tools Reduce administrative costs by automating sales order management processes Ensure high customer satisfaction by delivering accurate and timely information to customers Increase responsiveness and resolve customer issues faster SAP can help TriMark minimize supplier risk and enable high service levels. Better management of supplier relationships happens through strategic sourcing, purchasing, supplier collaboration, and supplier agreement monitoring. Contract Purchase Requisitions Purchase Order Investment Buying Line Buying Non Stock Ordering Customs & Compliance E-Procurement Take full advantage of special buying and loadbuilding opportunities by applying analytics to your purchasing decisions, reducing cost of goods sold Increase buyer productivity and enable informed decisions Increase efficiency through the automation of endto-end procurement processes that extend to the entire business ecosystem, including partners, suppliers, and customers Medline: Increased internet order volume to 15% of sales Chordus: Reduced days sales outstanding by 10% Grainger: Online orders now represent over 27% of the companies total sales Airgas: Customers can interact and transact at any time and across all channels West Chester: Increased warehouse space availability by 14% Pacific Coast Supply: Reduced purchasing error rate by 80% MSC: Order-taking costs are 60 percent lower Fastenal: Purchase order processing error rate reduced by 83% 11
1 2 3 4 1 2 3 4 Supply Chain Planning and Execution Profitability Optimization Distributors must operate efficient logistics and multiple warehouse locations to deliver goods to customers on time. It is key for TriMark to maintain inventory to meet demand and minimize cash bound in stock while keeping service levels high, in both distribution and project businesses. Best-run distributors like TriMark require execution excellence in cost recovery and rebate operations, a holistic view into procurement, and accurate customer stratification. Solution Capabilities Benefits Solution Capabilities Benefits SAP can help TriMark create transparent and highly responsive supply chain operations through: Demand & Supply Network Planning Supply Optimization Product Availability Check Capable to Promise & Rules Based ATP Backorder Processing Project Stock Transfer Physical Inventory Replenishment Wave Kitting & Assembly Labor Evaluation and Planning Keep cost of goods sold lower by reducing the amount of inventory on hand Keep inventory turns high, reducing obsolesces Reduce the amount of lost sales due to stock-outs and poor demand visibility Increase customer satisfaction by having what your customers need, when they need it, and where they need it Lower costs and increase the productivity of resources by reducing the amount of paperwork and improving inventory accuracy Increase revenues by improving customer satisfaction, cost effectively serving multiple customers, and offering value-added services It is essential for TriMark to have true visibility into vendor cost recovery, including procurement spending, supplier performance, and an understanding of very customer s cost to serve and net profitability. Visibility into these critical chargeback and rebate insights occurs through: Agreement Chargeback Rebate Accrual Reconciliation Settlement Cost Recovery Analytics Identify every vendor cost recovery opportunity that is due Connect rebate and chargeback process with procure-to-pay, order-to-cash and finance processes, eliminating costly errors, disputes and delays Increase worker productivity and overall financial performance and profitability Reduces open vendor AR balances Graybar: 30% increase in inventory turns Border States: Increased inventory turns by 4 per year API: 20% productivity increase in operations gained EZ-FLO: Increased inventory accuracy to 99.9% Summit: Increased chargeback claims 114% Border States: Cost recovery received within 1-3 days of filing 13
Why SAP? Proven & Safe for a Thin Margin Industry 1 INDUSTRY SPECIFIC 6 INNOVATIVE & SIMPLE Wholesale distribution funtionality that enables holistic planning, procurement, logistics, sales, chargeback, and financial processes Solutions that enable distributors to seize new opportunities by leveraging technologies like clouds, in-memory, and moblie computing 2 FLEXIBLE 7 FOCUSED ON VALUE Wholesale distribution capabilities, where the solution can be configured and personalized, not modified, to meet business and user requirements Continually laser focused creating value for distributors with solutions that enable operational excellence and profitable growth 3 INTEGRATED & OPEN 8 SAFE Wholesale distribution platform that can leverage non SAP applications and data for complete buiness visibility 4 TIMELESS Wholesale distribution solutions, designed to meet current needs without compromising the ability to meet future business requirements Continues to provide the safest, most stable, and functionally rich enterprise technology option in the Wholesale Distribution industry 9 STRONG ECO-SYSTEM Partners with Wholesale Distribution pre-configured SAP Business All-in-One solutions that enable rabid implementations 5 PROVEN 10 COMMITTED TO THE INDUSTRY Thousands of Wholesale Distribution customers, many of whom are members of the SAP Wholesale Distributions Special Interest Group Dedicated SAP Wholesale Distribution Business Unit and customer Exective Advisory Council (EAC) to set future innovation direction Our inspiration: We remain focused on the success of our customers - they are at the heart of our ambitions. The passion of SAP employees has brought amazing momentum a testament to our strategic direction, our customer orientation, and our world-class solutions. Bill McDermott, CEO, SAP 15
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