Solution in Detail Supply Chain Executive Summary Contact Us Service Parts Management
Unlocking Profitable Service Revenues Unlocking Revenue The Integration Key When it comes to obtaining service parts, today s customers expect higher performance than ever before. They don t want to wait for a part to be ordered and delivered; they expect to have it right here, right now. Open the Door to Profits 15% better fill rates To meet customers high expectations, companies need to stay up-to-date with changing customer demands while maintaining service levels. At the same time, they must manage their inventory costs and the complexity of their global supply chain to make sure the right parts are in the right places, at the right times, and at the right costs. To do that well, companies need to be able to coordinate and collaborate across all service parts processes, including planning, procurement, transportation, warehousing, and fulfillment, and not just for a single location, but globally, across the entire service supply network in real time. To get the job done, companies cobbled together point solutions and homegrown systems to create a Frankenstein of not-quite-integrated data that was real time only as of last Sunday s batch job. The resulting monster left many companies with a lack of inventory visibility, escalating costs, inefficient operations, and poor customer service. By synchronizing parts planning, warehousing, and fulfillment processes in real time, companies can achieve significant business results and unlock the potential of their after-sales service business. 2 / 23
Complete, End-to-End Integration Unlocking Revenue Better visibility to the supply chain means faster response. The Integration Key Open the Door to Profits Best-Run Supply Chain To respond quickly to changing demands, companies need a comprehensive, end-to-end, real-time solution with real-time access to the extended network for globally managing their service parts. This solution must allow them to coordinate and collaborate across all service parts processes, including planning, procurement, transportation, warehousing and fulfillment. Built-in integration based on industry best practices is the key to establishing such a solution with the lowest possible total cost of ownership (TCO). Without this functionality, a company would need to attempt to build and maintain over 300 complex integration points. A service parts management solution must also be accessible to everyone in the extended service parts supply chain, including employees, partners, suppliers, and customers. SAP solutions for service parts management make possible an integrated, coordinated service supply chain that helps you meet your customers demands consistently and cost-effectively. 3 / 23
Cut Costs and Improve Customer Service Unlocking Revenue The Integration Key Open the Door to Profits SAP solutions for service parts management deliver built-in support for industry best practices. They help companies optimize processes and achieve exceptional transparency and efficiency. They can integrate all aspects of planning, procurement, order processing, warehouse management, transportation, reverse logistics, and analytics activities, and they can deploy functionality incrementally as their needs and business change. Increase service margins 10% Lower inventory costs Increase service supply chain efficiency Optimize working capital Deliver superior, profitable customer service 4 / 23
Unlocking Revenue The Integration Key Open the Door to Profits SAP solutions to manage service parts leverage the latest technology innovations to enable a range of benefits: fast response to market dynamics; real-time visibility; always-on anywhere access; and low-cost, low-risk yet scalable and flexible deployment options for the entire service supply chain. SAP database and technology solutions enable professionals in service supply chain management to monitor large volumes of highly variable internal and external, quantitative and qualitative demand signals in real time. This data can be used to enrich analytics, enable predictive forecasting, and spot exceptions, mitigating demand and supply risk. Analytics solutions enable advanced modeling and optimization throughout every aspect of the service supply chain, from assessing current demand (to improve future forecasts) to monitoring service levels and measuring supplier performance.. Mobile solutions give service supply chain professionals always-on access to status reporting, exceptions, and alerts, ensuring quick responses, better decision making, and fewer risks to customer service and parts availability. Cloud-based solutions allow for fast, low-risk deployment, minimizing an IT footprint while ensuring long-term scalability and flexibility, along with technology and process integration 5 / 23
Integration Enables Profitable Service Planning and Procurement Warehousing Fulfillment Service Supply Chain Why SAP? Service Parts Planning and Procurement Inventory planning across the service supply network based on parts volumes, velocity, and segments. Service Parts Warehousing Efficient warehousing processes, including inbound and outbound processing, distribution, and storage. Service Parts Fulfillment Improved parts planning, fulfillment, and customer service. 6 / 23
Service Parts Management Analysis Executive Summary Contact Us Integrated Service Parts Management Planning and Procurement Service Parts Planning and Procurement Service Parts Warehousing Service Parts Fulfillment Warehousing Fulfillment Service Sales and Marketing Parts Marketing Management Fulfillment Monitoring Parts Pricing Parts Order Processing Including gatp Service Supply Chain Why SAP? Service Supply Chain Parts Demand Planning Parts Inventory Planning Parts Supply Monitoring Parts Supply Planning Parts Distribution Logistics Parts Internal Assembly and Repair Customer Collaboration Procurement Parts External Procurement Supplier Collaboration Integration of service parts management helps ensure visibility from planning and procurement to warehousing to fulfillment. Warehousing Reverse Logistics Parts Inbound Processing Receiving Internal Warehouse Processing Parts Outbound Processing Returns and Repair Logistics Claims and Returns Including Entitlements 7 / 23
Service Parts Planning and Procurement Planning and Procurement Capabilities Benefits Inventory planning across the entire service supply network, based on parts volumes, velocity, and segments, helps ensure efficiency, aligns processes, and provides superior customer service. 28% Lower stock outs where organization has real-time, enterprise-wide visibility to inventory SAP software for service parts planning and procurement is a comprehensive solution that offers full parts inventory visibility across the entire service parts supply network. Planners can make better informed distribution decisions based on what is currently happening across the ecosystem, in real time. They can also identify opportunities to reduce costs, as well as aggregate inventory data to determine parts availability with ease. Companies benefit from increased service supply chain efficiency; more aligned processes across parts planning, warehousing, and fulfillment; and superior customer service levels. 8 / 23
Service Supply Chain Transparency Planning and Procurement Capabilities Benefits 12% Lower inventory where forecasts are dynamic and are updated frequently SAP software for service parts planning and procurement improves visibility across the entire service supply network by integrating end-to-end business processes from suppliers to distribution centers and warehouses to customers using standard collaboration tools with intuitive, easy-to-use Web interfaces. Companies can model and determine multiechelon inventory strategies that balance inventory costs and service-level targets based on parts volume, velocity, segments, and other practical business rules, with decisions based on what is occurring in real time throughout the network. Forecasting includes the ability to handle sporadic parts demand, slow- and fast-moving parts, demand surges, new part introduction, supersession logic, and end-of-life planning. Procurement processes allow automated order creation based on aggregated planning results, establishing authorized stocking lists, repairversus-buy decision support, and rebalancing of inventories across the network. 9 / 23
End-to-End Visibility and Collaboration in Real Time Planning and Procurement Capabilities Benefits Enable end-to-end processes for planning and procuring parts to improve forecasting accuracy, enable collaboration across the ecosystem, and eliminate uncertainty and waste. 7% Higher forecast accuracy where organizations have enterprise-wide, two-way data access to external business partners By providing visibility across the entire service supply network in real time, SAP software for service parts planning and procurement enables companies to collaborate better with suppliers, customers, and logistics service providers. In addition, integration with end-toend business processes helps ensure all internal stakeholders are aligned and are using the same information. With accurate demand and inventory information, modeling functionality, and no lag time, companies can improve their forecast accuracy and gain confidence to make tough decisions about consolidating inventories and reducing safety stock levels. This results in lower inventory investments and better customer service levels and customer confidence. With automated procedures, cockpits, and dashboards to monitor operations and highlight all exceptions and alerts, planners, analysts, and buyers can maximize their efficiency and eliminate wasteful activities by focusing only on issues that require manual intervention. 10 / 23
Innovations for Service Parts Planning and Procurement Planning and Procurement Capabilities Benefits Real-time information and visibility across the network provides the most accurate and efficient technology platform. Insert image # here 25% Lower days sales outstanding where key order metrics can be analyzed across customer, order, geography, and product line The latest embedded analytical tools give users quick insights on activities with suppliers and customers throughout the service supply network, ensuring collaboration across the ecosystem and eliminating surprises. Flexible graphics and cockpits display real-time information and alerts, providing the ability to manage by exception. Work tasks and information are available on a wide variety of mobile devices for operations that are moving quickly and fulfilling the highest volumes. Demand signals from customers allow proactive management of customer inventories to enable better forecasting and fulfillment, eliminating surges in demand and the bullwhip effect. 11 / 23
Service Parts Warehousing Warehousing Capabilities Benefits Efficient and automated warehouse storage and retrieval optimizes operations and increases service levels throughout the service supply chain. 5% Higher order fill rate where warehouse data and reports are shared with all those related to warehouse operations of the company SAP software for service parts warehousing allows logistics managers to meet the challenge of sharpening their competitive edge while improving warehouse efficiency and optimizing operations. The key is not just optimizing procedures within a warehouse s four walls, but coordinating along end-to-end business processes. This helps ensure transparency of information in real time from the executive suite to the warehouse floor. It is only with coordinated, integrated processes that companies can meet ever-increasing customer expectations and demands while still making the most efficient use of assets. 12 / 23
Efficient Warehouse Operations Warehousing Capabilities Benefits 25% Lower inventory carrying cost where latest technology tools are used for receiving process, to enhance inventory accuracy and reduce labor costs SAP software for service parts warehousing helps you optimize and automate warehouse and distribution operations, including inbound and outbound processes, pick, pack and ship, storage and inventory management, yard management, and labor management. It uses advanced optimization techniques to create ideal work packages and then match them with appropriate human and equipment resources. This functionality provides a foundation for collaborative processes between multiple warehouses, suppliers, customers, logistics service providers, and other business partners. Warehouse operators validate warehouse movements using the latest technologies, including bar code scanning on radio frequency devices and RFID tag systems, ensuring the accurate and efficient movement of parts through the warehouse. Warehouse slotting based on demand and forecast data helps ensure that parts are stored in the most efficient locations. Cross-docking and effective rearrangement helps ensure minimal parts handling. 13 / 23
Warehousing Capabilities Benefits Turn Warehouse Operations into a Valuable Profit Stream Enable end-to-end processes for receiving, storing, and delivering parts, ensuring the organization s service parts business continues to provide a valuable profit stream. 12% Lower inventory carrying cost when warehouse management system can accommodate sudden labor fluctuations and customer demands for special services SAP software for service parts warehousing enables effective end-to-end processes for receiving, storing, and delivering parts in a flexible and scalable way, maximizing service levels to customers and ensuring that the service parts business continues to provide a valuable profit stream. By automating processes for full control of distribution center and warehouse operations, companies can improve asset utilization, increase throughput, and help ensure on-time and accurate order fulfillment. SAP software for service parts warehousing provides native integration to all the components used along the end-to-end business processes, while simultaneously providing a single user experience for warehouse operations. This greatly reduces the total cost of ownership, while also allowing companies to reduce order cycle times, increase the percentage of orders shipped on time, and achieve perfect order fulfillment. 14 / 23
Innovation for Service Parts Warehousing Warehousing Capabilities Benefits Flexible deployment options provide maximum performance and availability on a common technology platform. Insert image # here 33% More reports created by companies where analytics system provides easy-touse self-service analysis, reporting, and visualization The latest embedded analytical tools give users quick insights into what is happening in the warehouse. Flexible graphics and cockpits allow for the display of real-time information on the warehouse floor, providing analytics to all warehouse employees. Work tasks and information are available on a wide variety of mobile devices for operations that are moving quickly and fulfilling the highest volumes. Flexible delivery methods allow for cloud on-premise deployment to get organizations up and running fast. 15 / 23
Service Parts Fulfillment Fulfillment Capabilities Benefits Integrated fulfillment drives efficiency and provides real-time service and satisfaction for customers, dealers, and partners. 60% Lower customer complaints where customer and product segmentation strategy governs key decisions such as product allocation, service level, and pricing SAP software for service parts fulfillment supports effective customer order processing, complete with integrated functionality for global parts sourcing and availability, as well as parts price optimization and the ability to handle claims and returns. To address common challenges, such as delayed orders and changing customer needs, the software provides real-time visibility of inventory across the entire service supply network. As a result, companies can achieve higher service profits by providing superior customer service and driving greater service supply chain efficiency. 16 / 23
Global Order Fulfillment Fulfillment Capabilities Benefits 16% Lower sales outstanding where access to real-time upto-date order, delivery, and billing information is available to enhance business SAP software for service parts fulfillment helps you set up fully integrated, end-to-end business processes that support both forward and reverse logistics. You can benefit by eliminating storage and handling costs through third-party order processing, by streamlining recalls through integrated financial clearances based on quality check results, and by increasing customer retention through deposit-and-refund and inventory protection programs. Global available-to-promise functionality helps ensure parts are delivered on time to customers with the minimum logistics costs. It also considers alternate source locations, product substitutions, supersession, and preferential allocation logic. Fulfillment monitoring provides full visibility and enables efficient expediting of backordered parts. Marketing capabilities support the needs of parts trade promotions, and parts pricing helps to analyze margins and determine the optimal prices to maximize sales profits. 17 / 23
Deliver on Commitments and Maximize Profits Fulfillment Capabilities Benefits Enable end-to-end processes for parts orders, claims, and returns, allowing organizations to provide differentiated service and customer support while still earning a profit. 33% Lower orders cancelled where commitments and delivery dates are made based on inventory, manufacturing, and supply constraints SAP software for service parts fulfillment enables companies to make promises to their customers and keep those promises. Better visibility and transparency through end-to-end integration reduces the number of backorders created due to over-commitment. At the same time, being secure in knowing which parts are available in real time allows companies to eliminate under-commitment and to maximize sales opportunities. As a result, companies can provide superior customer service characterized by higher fill rates, more on-time deliveries, and swifter responses to changing customer demands. These companies benefit from greater supply chain efficiency, efficient and aligned processes, and higher profitability. 18 / 23
Innovations for Service Parts Fulfillment Fulfillment Capabilities Benefits Insightful analytics provide maximum flexibility and responsiveness on a common technology platform. Insert image # here 20% Higher revenue per employee in organizations that are using information to identify strategic and competitive advantages The latest analytical tools embedded in the solution empower users with real-time insights on what is happening with both operations and customers, providing the ability to make adjustments, take corrective actions, and improve customer service. Flexible graphics and cockpits allow for the display of real-time information and alerts, providing the capability to manage by exception. Work tasks and information are available on a wide variety of mobile devices for operations that are moving quickly and fulfilling the highest volumes. 19 / 23
Supply Chain Value Map Planning and Procurement Supply Chain Monitoring Supply Chain GPS Warehousing Fulfillment Sales and Operations Business Planning Sales and Operations Planning Inventory and Service Level Optimization Supply Chain Scenario Planning Service Supply Chain Why SAP? Demand-Driven Supply Chain Demand Management Collaborative Response Management Manufacturing and Supply Planning Logistics and Order Fulfillment Transportation Management Warehouse Management Track and Trace Service parts management is integrated into an end-to-end, cross-functional scenario. Service Supply Chain Service Parts Management 20 / 23
Why SAP? Planning and Procurement SAP software for service parts management helps you stay ahead in today s globalized economy by improving visibility and streamlining operations while maximizing customer service. Warehousing Fulfillment Service Supply Chain Why SAP? Service parts management software synchronizes planning, procurement, transportation, warehousing, and fulfillment processes for parts in real time, allowing companies to unlock the potential of their after-sales service businesses and achieve significant business results. Built-in integration based on industry best practices helps ensure the lowest total cost of ownership and provides visibility across your extended supply chain, including employees, partners, suppliers, and customers. You can harness the power of Big Data, cloud computing, mobile devices, and intuitive analytics to achieve the utmost transparency in your service supply chain. 14% higher business satisfaction rating where IT facilitates a high degree of integration with the company s ecosystem 21 / 23
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Solution in Detail Supply Chain Executive Summary Contact Us CMP 23809 (13/03) www.sap.com/scm/spm http://scn.sap.com/community/scm
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