Digitising the extended Supply Chain: SAP Supply Chain Strategy and Solution Innovations for Integrated
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1 Digitising the extended Supply Chain: SAP Supply Chain Strategy and Solution Innovations for Integrated SAP Forum Lausanne 13 June 2016 Business Planning SAP Solution Management, Head of Response and Supply Orchestration February 2016
2 Disclaimer This presentation outlines our general product direction and should not be relied on in making a purchase decision. This presentation is not subject to your license agreement or any other agreement with SAP. SAP has no obligation to pursue any course of business outlined in this presentation or to develop or release any functionality mentioned in this presentation. This presentation 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, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP intentionally or grossly negligent SAP SE or an SAP affiliate company. All rights reserved. Internal 2
3 Discussion Agenda Extended Supply Chain Strategy Introduction to SAP digital transformation framework Integrated Business Planning Solution Introduction Roadmap Status Customers 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 3
4 Digital Economy World s largest taxi company owns no taxi s Largest accommodation provider owns no real estate Digital Disruption is Happening: We all feel it! Largest phone company owns no infrastructure World s most valuable retailer owns no inventory World s largest movie house owns no cinemas Largest music company owns no music Worlds biggest book distributor owns no books 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 4
5 Opportunities for digitized supply chains 49% Supply Chain Executives said that digital supply chain will be both disruptive and important within the next three years Source: SCM World s 2014 Chief Supply Chain Officer survey 80% Said that digital operations are critical of every organizations manufacturing competitiveness Source: Digital Manufacturing & Design Innovation Institute 37% Said their organization has a strategy for how digital manufacturing will enable competitiveness Source: Digital Manufacturing & Design Innovation Institute 13% Said that their organization has digital manufacturing capabilities today Source: Digital Manufacturing & Design Innovation Institute 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 5
6 Digitizing the Extended Supply Chain Resource Scarcity People & Resources Suppliers & Logistics Sharing Economy Sustainability Business Network Individualized Products Industry 4.0 Customer Centricity Omni-Channel Products & Assets Customers & Markets 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 6
7 Customer Centricity Omni-Channels 45% of enterprises are building direct-to-customer fulfillment capabilities Source: SCM World s 2014 Chief Supply Chain Officer survey Same-day Delivery Demand Sensing 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 7
8 Example Capabilities for Digital Supply Chain Demonstration integrating demand and supply across a real time responsive supply chain with SAP Integrated Business Planning Supply Chain Control Tower Sales & Operations Inventory Demand Response and Supply Slides 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 8 Demo
9 Individualized Products Industry % of companies said that digital operations are critical of every organizations manufacturing competitiveness Source: Digital Manufacturing & Design Innovation Institute Configured Products Lot-Size of 1 Digitized Inventory 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 9
10 Sharing Economy 50% of networked companies are more likely than their peers to have increased sales, higher profit margins, and be market leaders Strategic Sourcing Project Network Product Networks Asset Network Source: McKinsey 40% Growth in adoption of business networks last 2 years Response Network Manufacturing Networks Logistics Network Source: Technology Adoption Report on Business Networks, Ardent Partners, SAP SE or an SAP affiliate company. All rights reserved. Internal 10
11 Resource Scarcity 64% of companies say that priority access to scarce raw materials/capacity and collaborative cost reduction with suppliers are extremely relevant to their competitive advantage Source: SCM World s 2014 Chief Supply Chain Officer survey Risk Management Environmental Responsibility Steady rise of cost savings as justification for investments in Environmental Responsibility Joint risk mitigation with suppliers drives ability to leverage supply chain disruptions Talent Acquisition Talent acquisition and development has become twice as hard since SAP SE or an SAP affiliate company. All rights reserved. Internal 11
12 Digitizing the Extended Supply Chain Resource Scarcity People & Resources Suppliers & Logistics Sharing Economy Sustainability Business Network Individualized Products Industry 4.0 Customer Centricity Omni-Channel Products & Assets Customers & Markets 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 12
13 Simplified Solution Approach SAP Fiori on any device Business Network Public cloud Design Extended Supply Chain Plan Respond Operate Deliver Managed cloud Produce SAP S/4 HANA On-premise Connectors Internet of Things 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 13
14 managed cloud Enabling Demand Networks public cloud Real-time Network Insights Plan Respond Deliver SAP Business Suite 4 HANA on-premise SAP HANA Platform Plan Respond Deliver Sales, Inventory and Operations Planning Demand Management Demand Network Response and Supply Management Production Planning and Scheduling Response Network Warehouse Management Transportation Management Logistics Network SAP SE or or an an SAP SAP affiliate company. All rights All rights reserved. reserved. Internal 14
15 SAP Integrated Business Planning Solution: A new approach to supply chain planning and response Mobile Enabled Experience Introduce state-of-the art user experience with communication capabilities (SAP JAM) and MS Excel Spreadsheets Built on SAP HANA Demand Networks require real-time monitoring and a focus on short-term planning and scenario simulation SAP Integrated Business Planning Enhanced User Experience One Harmonized Data Model Avoid any latency due to integration efforts and leverage the SAP ERP data model Sales & Operations Planning Supply Chain Control Tower Inventory New Planning Algorithms Leverage predictive analytics (e.g. demand sensing) algorithm in combination with optimization Cloud First Approach The solutions will be provided in the SAP Cloud but also be made available on-premise Demand SAP HANA Platform Response & Supply This presentation 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, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 15
16 Integrated Business Planning Evolution FUTURE Today S&OP 2.0 IBP for sales & operations New cloud-based HANA platform for advanced planning New Excel and HTML User Experience Common architecture / data model Support for internal collaboration S&OP 3.0 New HANA Cloud Integration model Integration content for ECC, APO, EIS Extended S&OP Functionality IBP 4.0 IBP for Inventory Supply Chain Control Tower IBP for Supply Gartner MQ: Leadership Quadrant IBP 5.0 IBP for Demand Further enhancements to each module 100+ Customers IBP 6.x IBP for Response & Supply Order-based data model Closed loop integration and net Change replication 6.1, planned March 2016 IBP IBP and S/4HANA advanced workflows Further industry enhancements to all modules Integration with financial planning Integration with Sales and Trade Promotion Planning This presentation 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, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 16
17 IBP has a growing customer base and is a proven platform Consumer Products Chemicals Pharma Mill Products & Mining Manufacturing High Tech Retail Automotive Services Aerospace 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 17
18 SAP Integrated Business Planning Enhanced User Experience Supply Chain Control Tower Sales & Operations Inventory Demand Response and Supply Real-time insight and monitoring on aggregated and detailed levels Operational and financial planning and simulation Integrated processes across all time horizons with prebuilt templates & integration Highly configurable data model and pre-build templates and integration Embedded social collaboration platform to engage all stakeholders Amazing user experience with SAP Fiori and embedded Excel Powered by SAP HANA 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 18
19 Supplier Supplier Supplier Supplier Supplier Supplier Plant Plant Plant Central DC Asia Pacific Central DC Europe Central DC Americas Local DC Local DC Retailer Distributer Customer Customer Customer Customer SAP Supply Chain Control Tower Increase end-to-end network visibility combining planning, execution and network data Sales & Operations Supply Chain Control Tower Inventory Intelligent alerting with resolution to increase ontime delivery performance Demand Response and Supply Collaborative framework for all players in the supply chain to monitor performance and drive continuous improvement Supply Chain Control Tower Integrated Business Planning Increase supply chain agility and response, managing risk, reducing costs and increasing service -12% Days of Inventory With real-time, enterprise-wide visibility into inventory* ERP 3 rd Party APO ERP TM APO 3 rd Party ERP 3 rd Party APO SNC EM 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 19
20 SAP Integrated Business Planning for demand Supply Chain Control Tower Develop more accurate mid-term statistical forecasts Sales & Operations Demand Inventory Response and Supply React faster to short-term demand changes with pattern-recognition-based algorithms Drive more accurate deployment of product based on short-term demand Collaborate to ensure the most accurate forecast -35% Outbound Expediting When forecasting all combinations of SKU and inventory locations* 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 20
21 SAP Integrated Business Planning for sales and operations Create the optimal business plan to drive revenue growth and increase market share Supply Chain Control Tower Sales & Operations Inventory Demand Response and Supply Effectively balance demand and supply and attain financial targets Increase speed and agility of planning and drive most profitable responses Improve forecast accuracy and on-time delivery 1% 2% Revenue Growth Growth in top-line revenue with integrated sales and operations planning 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 21
22 SAP Integrated Business Planning for inventory Improve customer service levels Supply Chain Control Tower Sales & Operations Inventory Maximize efficiency of inventory and working capital Demand Response and Supply Improve planner productivity, automate and standardize planning processes Shorter and complete inventory target-setting cycles at each tier Reduce production and distribution costs Improved service levels with a 20% reduction in days of inventory Customer service levels lifted from 93.7% to SAP SE or an SAP affiliate company. All rights reserved. Internal 22
23 SAP Integrated Business Planning for response and supply Strategic, Tactical and Operational supply planning covering all time horizons in one solution Sales & Operations Planning Supply Chain Control Tower Inventory Planning and Simulation / What-if analysis / Pegging and Gating-factor analysis Unconstrained and constrained planning with profit optimization combining operational and financial planning Manage allocations and response for optimal customer service across prioritized demand streams Operate lean low cost operations concurrently planning capacity and materials across manufacturing networks Demand Response and Supply 40% Shorter Lead Times 5,6% Higher On-time Delivery With flexible rules-driven supplydemand matching With integrated material and capacity order planning and promising 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 23
24 IBP, APO and S/4 HANA Benefits APO Production Planning and Detailed Scheduling SAP integrated Business Planning Sales & Operations Planning Response & Supply Supply Chain Control Tower APO SNP APO DP & Demand Signal Management Inventory Demand APO Global Available to Promise SAP S/4 HANA Enterprise Management (SAP HANA) Flexible roadmap to leverage existing implementations (i.e. APO) and adopt new innovations Standard integrations with Business Suite (ERP, APO, BPC ) Choice where to execute business processes, and can evolve over time APO and IBP bring deep industry capabilities to maximize value delivery now IBP and HANA enable evolution to next generation real time supply chain platform New Rapid Deployment Solution for IBP enables deployment in weeks 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 24
25 S/4 HANA Outlook: Secure roadmap with integration of both existing and new SCM solutions with S/4 HANA Supply Chain Planning (On Premise Deployment) Integrated Business Planning (IBP) (New, Unified Platform for Cloud Deployment) Supply Chain Execution Platform (On Premise Deployment) Advanced Planning & Optimization (APO - DP, SNP, PP/DS, GATP) Supply Network Collaboration (SNC) SAP HANA Platform Supply Chain Control Tower Sales & Operations Planning Demand Inventory SAP HANA Platform Supply & Response Warehouse Management Track & Trace Transportation Management SAP HANA Platform S/ SAP SE or an SAP affiliate company. All rights reserved. Internal 25
26 More Information: View SAP Value Map solutionexplorer.sap.com. Line of Business > Supply Chain Visit us online Benchmark your performance 2016 SAP SE or an SAP affiliate company All SAP rights SE reserved. or an SAP affiliate company. All rights reserved. Internal 26
27 Q&A Contact Details Patrick Crampton-Thomas SAP Solution Management, Response and Supply Orchestration patrick SAP SE or an SAP affiliate company. All rights reserved. Internal 27
28 Your opinion counts A direct feedback after the presentation is important for every speaker. The Event App can be downloaded for free at the following shops: Please vote now by using our Swiss Event App. Win one of 3 stand-up paddles at the end of the day! 2016 SAP SE or an SAP affiliate company. All rights reserved. Internal 28
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