SAP S/4HANA for Product Compliance Solution Overview and Road Map

SAP S/4HANA for Product Compliance Solution Overview and Road Map Dr. Rüdiger Kreuzholz, SAP December 08, 2017

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Agenda Solution Overview Road Map Benefits, Customers, and Further Information 3

Solution Overview

SAP S/4HANA, the Next Generation Business Suite Internet of Things Business networks SAP Fiori UX role-based user experience for all devices SAP S/4HANA applications and extensions instant insight-driven applications for all lines of business and industries SAP HANA platform in-memory platform for all data People Devices Social networks On-premise edition Cloud edition Big Data Native integration for hybrid scenarios Ariba Concur Fieldglass hybris Software SuccessFactors 5

Product Compliance Current Trends COMPLIANCE REQUIREMENTS Growing number and complexity Frequent changes COMPLEX SUPPLY CHAINS Increased compliance risks INDIVIDUALIZED PRODUCTS Distinct compliance determination RESOURCE CONSTRAINTS More tasks with less resources STAKEHOLDER DEMANDS Information disclosure need 6

Product Compliance Manage Challenges Through Digitization COMPLIANCE REQUIREMENTS Embed compliance in product development Stay up-to-date with regulatory content COMPLEX SUPPLY CHAINS Streamline communication INDIVIDUALIZED PRODUCTS Automate compliance assessment RESOURCE CONSTRAINTS Automate compliance processes Implement controls throughout the lifecycle STAKEHOLDER DEMANDS Make information accessible Automate document creation and distribution 7

Value Map for Digital Products and Projects Project and Portfolio Management Idea Management Portfolio Management Project Management Resource Management Project Connectivity Compliant Product Lifecycle Management Product Development Recipe Development Authoring Tool Integration Product Costing Handover to Manufacturing Model Based Enterprise Product Marketability and Chemical Compliance Safety Data Sheet and Label Management Dangerous Goods Management Source Assignment Product and Project Insights Sense and Respond to Design Insights Design and Project Networks Compliant Product Network 8

Product Compliance Solutions from SAP Manage Global Product Safety and Compliance Throughout the Product Lifecycle Product marketability and chemical compliance Ensure compliance of products and chemicals to secure the right to market, sell, and ship products Safety data sheet and label management Manage safety data sheet and labeling requirements to ensure compliance and accelerate product introduction Dangerous goods management Provide safe and compliant transportation of hazardous materials to avoid delivery delays and protect brand value 9

Products Capabilities Product Compliance Solutions from SAP Key Capabilities and Products Product Marketability and Chemical Compliance Product Marketability and Chemical Compliance Safety Data Sheet and Label Management Dangerous Goods Management Discrete Industry Process Industry On Premise SAP S/4HANA for product compliance Cloud SAP Product Stewardship Network On Premise SAP EHS Regulatory Content Cloud (Hosted Product Safety) Product Safety On Demand Cloud SAP EHS Regulatory Documentation 10

Product Marketability and Chemical Compliance Overview Discrete Industry Protect marketability and automate compliance assessment Central data and product compliance information management Automated compliance assessment Integrated compliance checks Analytics to monitor compliance status and identify risks Collaboration tools for streamlined supply chain communication fewer regulatory citations for top-quartile 79% companies as compared to average performers* Compliance overview against different requirements * Source: SAP Business Transformation Study 11

Product Marketability and Chemical Compliance Overview Process Industry Accelerate go-to-market with embedded product and chemical compliance Central data and product compliance information management Integrated substance volume tracking and registration checks Automatic compliance determination Volume and compliance monitoring reduction in substance-volume-tracking 75% support time with SAP software* Substance volume tracking volume monitoring * Source: SAP Business Transformation Study 12

Safety Data Sheet and Label Management Overview Protect revenue and brand with globally compliant safety data sheets and labels Central data and content management Automated product classification Central document and label template design Integrated document shipping and label printing Central labeling workbench for full labeling control SAP EHS Regulatory Content for up-to-date content SAP EHS Regulatory Documentation OnDemand for safety data sheets and component information faster creation of safety data sheets, + 50% faster 80% response to customer inquiries* * Source: SAP Business Transformation Study Safety data sheet creation and management document preview 13

Dangerous Goods Management Overview Ensure safe and compliant transportation of dangerous goods Central data and regulatory information management Automated dangerous goods classification Packaging requirements management Integrated dangerous goods checks Dangerous goods documents 150,000 annual savings from dangerous goods claims by the Perstorp Group* * Source: SAP Business Transformation Study Sales order dangerous goods check 14

Road Map

SAP S/4HANA Compatibility Scope Solutions KEY MESSAGE Compatibility Pack allows the use of certain* Classical SAP Solutions for a specific period of time, in a licensed S/4HANA installation, provided the customer has [or acquires] licenses to such solutions from SAP. Classical ERP Scope + LoB and Industry solutions S/4HANA On-Premise Scope Compatibility Scope * Listed in the Compatibility Pack Matrix 16

SAP S/4HANA Product Compliance as Part of the Compatibility Scope The following capabilities out of the classical SAP Solutions SAP ERP and SAP EHSM component extension are part of the compatibility scope: Safety data sheet management Global label management Dangerous goods management Substance volume tracking and notification checks Product marketability and chemical compliance for discrete industries S/4HANA On-Premise Scope Compatibility Scope The SAP Product and REACH Compliance add-on (SPRC 2.0) for process industries is not part of the compatibility package. Capabilities of the compatibility scope are covered by existing product safety and stewardship licenses. 17

Product Compliance Key recent and planned innovations Recent innovations 2018 Planned innovations (*) Product Compliance (all capabilities) SAP S/4HANA for Product Compliance (on premise) as new product for Product Safety and Stewardship (SAP S/4HANA for product compliance 1709) Product Marketability and Chemical Compliance Enhancements for the new ruling of the European Court of Justice, interpreting articles in the REACH regulation regarding the presence of substances of very high concern (SVHC) (SAP S/4HANA for product compliance 1709) Improved regulatory and functional coverage to support global marketability checks (SAP EHS Regulatory Content marketability package 1705) Safety Data Sheet and Label Management Improved regulatory and functional coverage to support global safety data sheet authoring (SAP EHS Regulatory Content safety data sheets authoring package 1705, SAP EHS Regulatory Documentation 2.5.9/12) Enhance REACH compliance by supporting exposure scenarios for Manufacturer customers (SAP EHS Regulatory Documentation 2.5.10) Dangerous Goods Management SAP Transportation Management integration for dangerous goods (SAP S/4HANA for product compliance 1709) Improved regulatory and functional coverage to support global dangerous goods management (SAP EHS Regulatory Content dangerous goods package 1705, SAP EHS Regulatory Documentation 2.5.9/12) Product Marketability and Chemical Compliance Simplified, ready-to-run solution with standardized data model for product marketability (SAP S/4HANA for product compliance 1808 / 1809) End2end processes integration in Procure to Pay and Order to Cash with embedded Product Compliance (SAP S/4HANA for product compliance 1808 / 1809) Regulation aspects as a self-contained processing and delivery unit (SAP S/4HANA for product compliance 1808 / 1809) Improved regulatory and functional coverage to support global marketability checks (SAP EHS Regulatory Content marketability package 1711 / 1805 / 1811) Safety Data Sheet and Label Management Improved regulatory and functional coverage to support global safety data sheet authoring (SAP EHS Regulatory Content safety data sheets authoring package 1711 / 1805 / 1811, SAP EHS Regulatory Documentation 2.5.19/23 Extend exposure scenarios to retailer customers (SAP EHS Regulatory Documentation 2.5.21) Dangerous Goods Management Intelligent Compliance Management with Machine Learning capabilities (SAP S/4HANA for product compliance 1808 / 1809) Improved regulatory and functional coverage to support global dangerous goods management (SAP EHS Regulatory Content dangerous goods package 1711 / 1805 / 1811, SAP EHS Regulatory Documentation 2.5.19/23) * This is the current state of planning and may be changed by SAP at any time without notice. SAP S/4HANA and S/4 HANA Cloud innovations 18

SAP S/4HANA for Product Compliance Recent Innovations Dashboards and Visual Harmonization 19

SAP S/4HANA for Product Compliance Recent Innovations New Analytics New and simplified analytics Compliance explorer Exemption explorer Check criteria analysis Compliance assessment 20

SAP S/4HANA for Product Compliance Enhancements for the new ruling of the European Court of Justice (ECJ) for EU REACH SVHCs (O5A) Changed article definition requires checks and reporting for all articles included in a complex product separately For all articles in a product, all SVHC candidate substances with >0.1% must be declared Significant higher effort, as complex products consist of thousands of articles and each of them has to be verified separately Provision of changed and new capabilities to support REACH 05A including updated check and classification functions and substance explorer capabilities. 21

SAP S/4HANA for Product Compliance Classic Capabilities as Part of the SAP S/4HANA Scope SAP S/4HANA 1709: Provisioning of classic product compliance capabilities as part of the SAP S/4HANA scope (besides the compatibility scope) Choices for existing customers: Use compatibility scope capabilities covered by existing licenses Legal changes only, end of use rights in 2025 Buy new SAP S/4HANA for product compliance license (with credits for existing licenses), use capabilities of the S/4HANA scope and benefit from future renewal and scope extension Solution renewal and scope extension 22

SAP S/4HANA for Product Compliance Planned New and Simplified Solution One solution enabling real-time product compliance processes embedded into the value chain and connected to business partners Covering all product compliance processes Product marketability and chemical compliance Safety data sheet and label management Dangerous goods management Designed for local and global compliance coverage For all manufacturing industries, retailers, etc. Integrated into core end-to-end business processes State of the art user experience Embedded content for simple content consumption Built on SAP HANA for superior analytics and performance 24

SAP S/4HANA for Product Compliance Planned End-2-End Integration for Product Marketability and Chemical Compliance Compliance data creation Marketability assessment Marketability check Marketability check Marketability check Product Definition Inquiry/Sales Order Initial Transport Planning Outbound Delivery Final Transport Planning Picking & Packing Transport New Market Requests New Country Requests Substance Volumes Substance Volumes 33

Machine Learning in Product Compliance Real life data Data preparation Train model Machine Learning allows to scale automation rapidly. Learning is performed from real life products. Apply model Dangerous Goods Classification Crucial expert-driven process step Many decisions are industry or customer specific. Deep learning can automate important classification steps and learn from previous expert decisions. Substance Group Assignments Many regulations refer to generic substance groups like lead compounds instead of specific substances. Deep learning can propose relevant substance groups and regulations. 34

Product Compliance Future direction and vision 2019 Future direction(*) Product Marketability and Chemical Compliance Integration with Target Driven Recipe Development Supply-chain-integrated compliance checks and compliance documentation Purpose-driven increase of regulatory coverage together with partners Insight into the business by combining logistics with compliance analytics and proposing actions Enhance Marketability checks by Substance Volume Tracking Improved regulatory and functional coverage to support global marketability checks Safety Data Sheet and Label Management End2end integration of SDS management with SAP EHS Regulatory Documentation on Demand Improved regulatory and functional coverage to support global safety data sheet authoring Dangerous Goods Management Improved regulatory and functional coverage to support global dangerous goods management 2020 Vision(*) Product Marketability and Chemical Compliance Simplified processing of regulatory updates Improved regulatory and functional coverage to support global marketability checks Safety Data Sheet and Label Management Improved regulatory and functional coverage to support global safety data sheet authoring Dangerous Goods Management Simplified, ready-to-run solution for dangerous goods with embedded content using dashboards and SAP Fiori apps Sales-and-shipment-integrated dangerous goods checks and information on packing lists and delivery notes Improved regulatory and functional coverage to support global dangerous goods management * This is the current state of planning and may be changed by SAP at any time without notice. SAP S/4HANA and S/4 HANA Cloud innovations 35

SAP S/4HANA Cloud for Product Compliance SDS Management with SAP EHS Regulatory Documentation on Demand (SAP ERD) Delivery of component and product data and compliant safety data sheets SAP S/4HANA Cloud for Product Compliance Design Manage component & product data API Hub Make Create SDS, DG and label Market / Sell Ship SDS and Check DG Compliance SDS Generation with SAP ERD Add additional component data Keep up-to-date with global regulations Move Print DG Documents Perform hazard & regulatory classifications Service Provide SDS updates Create safety data sheets and hazard label texts SAP ERD Enables an efficient and integrated process for the generation of compliant safety data sheets (SDSs) in 48 languages for 114 countries Complements core product compliance processes like product marketability and dangerous goods management, which run natively in SAP S/4HANA Cloud 1 Connects via APIs to SAP S/4HANA Cloud 1 or is used stand alone via the SAP ERD App running on the SAP Cloud Platform 1 Product Marketability, Dangerous Goods Management, and cloud connection to SAP ERD to be delivered as part of the SAP S/4HANA Cloud roadmap 36

Benefits, Customers, and Further Information

SAP S/4HANA for product compliance Benefits Protect the brand by mitigating risks with full business process integration in SAP S/4HANA, up-to-date information, and compliance controls throughout the product lifecycle Reduce compliance costs by streamlining compliance processes with state-of-the-art SAP Fiori based user experience, analytics, automation, and embedded content including regular updates Increase revenue by accelerating product introduction with real-time decision support and streamlined product development through embedded product compliance Ensure on-time delivery with up-to-date compliance documents and safe transportation of dangerous goods Increase visibility into compliance with analytics, enabling quick responses to compliance inquiries 38

1900+ Companies Rely on SAP for Product Compliance 39

Product Compliance Solutions from SAP Further Information Solution briefs Product Safety and Stewardship for Process Industries Product Compliance for Discrete Manufacturers SAP EHS Regulatory Documentation Global Label Management Videos SAP EHS Regulatory Documentation PSN: Conflict minerals scenario Solution Explorer Compliant Product Lifecycle Management 40

Thank you. Contact information: Dr. Rüdiger Kreuzholz Solution Expert SAP SE ruediger.kreuzholz@sap.com