SAP s Networked Solution for Product Stewardship Supply Chain Management for Product Compliance and Sustainability

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1 SAP s Networked Solution for Product Stewardship Supply Chain Management for Product Compliance and Sustainability Randolf Hager, SAP AG April 29 th 2014 You can register FOR FREE

2 SAP s Invest in Environment, Health and Safety PSN >2500 registrations on platform EHSM >2000 applications in market SAP EHS for Process Industries SAP EHS for Discrete Industries SAP EHS Environmental Compliance SAP EHS Management SAP Business Suite Cloud on SAP Hana SAP Product Stewardship Network SAP AG. All rights reserved. 2

3 SAP Product Stewardship Network > Cloud-based Business Network for exchanging product compliance and sustainability information SAP Product Stewardship Network is Elegant (Simple, information dense) Consistent (Info reporting across standard content) Directional (Company knows what to do to improve) Supplier Main capabilities Customers Business Network Invite and Connect Content (Legal & Partner) Inform and Update Product Info Exchange Provide, Request, Analyze Backend Integration Control and Automate 2014 SAP AG. All rights reserved. 3

4 PSN in Numbers (April 2014) Companies out of more than 23countries worldwide already registered More than % Network growth every 2 weeks 3 Scenarios available: Compliance Declaration Sustainability Assessment Conflict Minerals (end April 14) Active Participants as of April % System availability guaranteed Participants come from 3 Continents Americas, Europe and Asia 2014 SAP AG. All rights reserved. 4

5 SAP Product Stewardship Network - Scope 2014 Product Information Management Platform for Compliance and Sustainability! One Business Network Communicate and exchange data with supply chain partners Compliance Documents Exchange docs attached to product declaration or company profile Backend Integration Product Declaration Request and provide Reach/RoHS data Conflict Minerals Collect and check Deliver report Sustainability Assessment Conduct supplier surveys Analyze and improve sustainability 2014 SAP AG. All rights reserved. 5

6 SAP PSN means Speed in many Directions EHSM build install/configure train/use (SAPBusiness Suite) 12 month 3-6 month PSN Product Declaration build/deliver/use 9 month PSN Sustainability Assessment build/deliver/use 5 month 2 month PSN Conflict Minerals build/deliver/use 3 month Fast requirement response PSN SVHC Content Update build/use 10 days Faster ROI 2014 SAP AG. All rights reserved. 6

7 Sustainability Assessment Scenario End-to-End Cloud Application

8 Sustainable Supply Chain and Products: Trends Sustainability: General: NGOs put spotlight on origin of materials and ethical sourcing Global, distributed supply networks Increasing number and complexity of product regulations Increasing complexity of supply network relationships Consumers demand sustainable products Acceleration of the product innovation process 2014 SAP AG. All rights reserved. 8

9 Sustainability Assessment SAP Product Stewardship Network Features Business Network Register a free basic account Connect with your customers and suppliers Promote your sustainability profile Content Library Toolkits available containing a questionnaire, documentation and the scoring model Science based sustainability metrics Support for more than 90 different product categories (e.g. Computers, Printers, Mobiles, Milk, Beer, Beef, Chocolate) Sustainability Assessments Collect and manage customer / supplier data Receive and complete surveys electronically, easily keep your data up-to-date Analyse and compare your sustainability score with that of other companies on the network Expert Community Exchange with other experts and discuss sustainaibilty topics Get support Stay up-to-date 2014 SAP AG. All rights reserved. 9

10 Benefits Gain visibility to sustainability issues in your supply chain Discover blind spots and manage overall supplier risk. Identify hotspots for improvements: which suppliers and product categories have the biggest impact on overall sustainability. Provide sustainability information to your customers Consumers are rethinking consumption with sustainability in mind and expect information under what conditions products were produced. Foster collaboration within your supply chain Identify opportunities for collaboration around innovation, efficiency, and cost savings SAP AG. All rights reserved. 10

11 2014 SAP AG. All rights reserved. 11

12 2014 SAP AG. All rights reserved. 12

13 Conflict Minerals Scenario End-to-end Networked Solution

14 BACKGROUND ON THE CONFLICT MINERAL RULES The SEC adopted the conflict mineral rules under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank Act ) on August 22, The rules require public companies that file reports with the SEC to annually disclose information about their use of specific minerals originating and financing armed groups in the Democratic Republic of the Congo ( DRC ) or an adjoining country. Conflict minerals are Cassiterite (tin, tin alloy, solder), Columbite-Tantalite (Tantalum), Gold, Woframite (Tungsten). are tantalum, tin, tungsten, and gold (3TGs). The rules will encompass many public companies because conflict minerals are used in many products, such as smartphones, cameras, computers, microchips, automobiles, tools and heavy machinery SAP AG. All rights reserved. 14

15 Conflict Minerals Compliance with PSN 1. Supplier upload their GeSi sheet and publish it (restricted/ unrestricted) 2. Customer upload - If customer received GeSi sheets per , customer can upload their received GeSi sheets (single or mass upload). 3. Check Single Supplier GeSi sheet (completeness and correctness) 4. Check Smelter Rollup (reported smelters) and smelter status (compare with certified smelter lists) 5. Reporting overall suppliers which will support the SEC filing as well as triggers follow up activities to the suppliers e.g. ask for correct smelter information 2014 SAP AG. All rights reserved. 15

16 Conflict Minerals Compliance Enable Conflict Minerals Compliance with PSN Manage risk by determine the presence of conflict minerals in products sold and distributed Manage the complex network of suppliers and distributors Assess conflict minerals related data and generate the required reports needed to comply with the SEC's final rule Benefit from a complete solution including certified smelter lists and updates Increase margins by reducing the cost of compliance and integrating safety into daily operations Conflict Minerals Compliance Conflict Mineral Reports Analyze GeSi sheets Generate report to comply with SEC rules Smelter lists Smelter Rollup Compliance check Certified smelter lists and updates 2014 SAP AG. All rights reserved. 16

17 Check Single Supplier GeSi sheets SAP AG. All rights reserved. 17

18 Supplier Status report 2014 SAP AG. All rights reserved. 18

19 Product Compliance Scenario Networked Solution with SAP EHSM and SAP PSN

20 Product Compliance - What are the Challenges? Companies are obliged to avoid or declare harmful substances Requirements for Product Sustainability and Compliance are coming from Legislation: REACH-SVHC EU-RoHS, China-RoHS Conflict Minerals Numerous Suppliers Rapid product development and product changes Industry: Industry Sectors (e.g. IMDS) Customers, OEMs Internal Company Directives Global supply chain Complex composition of products 2014 SAP AG. All rights reserved. 20

21 EHS Management and SAP Product Stewardship Network A Networked Solution SAP Product Stewardship Network Cloud Suppliers Business Network Declaration Exchange Regulatory Content Customers An online collaboration community accessible by everyone Product compliance status Declaration requests Content download Manufacturer Compliance Management Change Management Collaboration Analytics and robust data management, with embedded controls into key business processes EHSM Product Compliance Onsite 2014 SAP AG. All rights reserved. 21

22 How SAP can Support! What is IT s contribution to manage Product Compliance in such an environment with reasonable costs? Take advantage of existing BOM data (e.g. in SAP MM, SAP PP, CAD) PRODUCTION Select and manage compliance data your business role needs Collect supplier data effenciently via cost free portal solution Automatically integrate supplier information into compliance data base Transparency in product material composition and risk alerts 2014 SAP AG. All rights reserved. 22

23 SAP Networked Solution with EHSM & PSN Processes efficiency + Collaboration Process integration between Product Stewardship Network and EHS-MGM Supplier onboarding on the Product Stewardship Network Use of ERP Suppliers to create Business Partner Network Efficient collaboration with suppliers to exchange component declarations Use of ERP Material within declaration exchange Optimized declaration request handling Automated synchronization between Network and EHS-MGM including declarations updates 2014 SAP AG. All rights reserved. 23

24 Integration into SAP EHSM Networked Solution Within the Compliance Workbench in SAP EHSM a component with all assigned compliance requirements is displayed. Within the 1 Compliance Product Structure all suppliers for a purchased part will be listed. In the tab 2 Declarable Substances no data is maintained SAP AG. All rights reserved. 24

25 Integration into SAP EHSM Networked Solution The Business Context Viewer provides an integration into SAP Product Stewardship Network. 4 It can directly be verified if data for a supplied part is available in SAP Product Stewardship Network. If data is available, the CoC or IPC Version 2 can be downloaded into the local network and uploaded into EHSM 3.0. If no data is available, a request can be sent to the supplier. 4 SAP Product Stewardship Network On Premise: SAP EHSM Cloud 2014 SAP AG. All rights reserved. 25

26 Integration into SAP EHSM Networked Solution Integration into SAP Product Stewardship Network Within the compliance workbench, the business context viewer provides an integration into the SAP Product Stewardship Network. It can directly be verified if data for a supplier part is available within the PSN. If data is available, the CoC (Certificate of Compliance) or IPC Version 2 can be downloaded from the attachment in SAP Product Stewardship Network onto the local network and uploaded/imported into EHS Management system SAP AG. All rights reserved. 26

27 Compliance Data Users across Organization Role-Based Support by User Interface Compliance Engineer Overall View Engineering Manager Sales/Service Representative Product Manager Compliance Manager Product Compliance Purchasing Agent Mechanical Engineer Electrical Engineer Component Engineer Component Compliance Mechanical Engineer Basic Material Specialist Basic Material Management Compliance Manager Regulation Management 2014 SAP AG. All rights reserved. 27

28 Working with Suppliers Request Component Declaration from Supplier 2014 SAP AG. All rights reserved. 28

29 SAP Product Stewardship Network - License Model Key Features and Pricing for all Scenarios Basic Edition Professional Edition Enterprise Edition Build data exchange connections to customers / suppliers Create, request & maintain product declarations Provide Conflict Mineral information Register 1 user 1 GB memory space Free of charge Includes all capabilities of Basic Edition Mass upload and update of declarations via csv-file Download declarations as pdf and IPC-xml (class C) Includes 3 user registrations 10 GB memory space Buy additional users Price: 1500 Euro / year Includes all capabilities of Professional Edition Integration into SAP EHSM Supplier onboarding support Includes support via Service Marketplace Includes 20 user registrations 100 GB memory space Buy additional users Price: contact SAP Working with Sustainability Assessment requires additional purchase of TSC Questionnaire Toolkits! 1 Toolkit: $ 399, 3 Kits $ 699, all Kits $ 999 (currently 93 kits available) 2014 SAP AG. All rights reserved. 29

30 Special Service: Supplier Onboarding for Enterprise Customers Data analysis, invitation support and enablement of suppliers 2014 SAP AG. All rights reserved. 30

31 SAP Methodology for Supplier Onboarding STRATEGY Run DESIGN AND BUILD MONITOR REGISTER EDUCATE ON HOLD 2014 SAP AG. All rights reserved. 31

32 Timelines Supplier Onboarding Preparation Phase Execution Phase Exec. Prerequisites 2-4 weeks Kick-off Strategy 2-4 weeks Design&Buid 2-4 weeks 2-4 weeks Buyer / Stakeholder Session Supplier Onboarding Final Vendor Upload List Upload Suppliers 8 12 weeks Supplier Education Follow-up on Suppliers Close and review 2014 SAP AG. All rights reserved. 32

33 Compliance Policy Impact Percentage Targeted Suppliers Transacting on the Network 20% 40% 60% 80% Weak Policy Moderate Policy Strong Policy No internal communication Optional participation No deadlines No consequences Internal awareness Expectation set Deadline Incentive No consequence Internal buy in Expectation embedded Mandatory Deadline NCE process in place Incentive / consequence (paper fee, no paper) A strong compliance policy will result in more suppliers transacting electronically 2014 SAP AG. All rights reserved. 33

34 Thank You YOU can register FOR FREE on the collaboration platform Further information about EHS Management: help.sap.com/ehs-comp Product Management:

35 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see for additional trademark information and notices SAP AG. All rights reserved. 35

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