Rethinking Supply Chain SAP SUPPLY CHAIN STRATEGY Hans Thalbauer, March 2014
Volatile Markets & Growing Logistics Complexity Supply Chain is Adopting to New Business Realities BUSINESSES TRANSFORM SUPPLY CHAINS TO DEMAND NETWORKS 2014 SAP AG. All rights reserved. Internal 3
Constant Challenges for Supply Chain Professionals Solve Complex Problems in Real-Time Manage the Supply Chain in Real Time Only 20% of Supply Chain Professionals have information available within a day Improve Short-Term Planning Results Forecast accuracy for the first week is in average ower than 70% Orchestrate the Global Network of Partners Less than ~10% of suppliers are directly connected to their customer s supply chain Execute the Supply Chain efficiently About 10% of world-wide GDP is related to logistics spending 2014 SAP AG. All rights reserved. Internal 4
SAP is Rethinking Supply Chain Management Supply Chain Management Solution Requirements Provide an end-to-end MONITORING solution with real-time what-if decision support Provide intuitive and predictive PLANNING and response management solutions [SAP Supply Chain Management powered by SAP HANA] Provide a flexible & reliable business NETWORK to collaborate with partners Provide industry specific and best in class LOGISTICS capabilities 2014 SAP AG. All rights reserved. Internal 5
SAP Supply Chain Solution Strategy Enable Businesses to Transform their Supply Chains to DEMAND NETWORKS Supply Chain Monitoring Ensure integrity and predict issues of the DEMAND NETWORK [THE DEMAND NETWORK] Integrated Business Planning Balance DEMAND plans with NETWORK constraints for profitability Demand Driven Supply Networks Sense & shape DEMAND and orchestrate the fulfillment NETWORK Logistics & Order Fulfillment The DEMAND NETWORK requires speed & efficiency in Logistics Powered by SAP HANA 2014 SAP AG. All rights reserved. Internal 6
Supply Chain Monitoring Ensure the Integrity and Predict Issues of the DEMAND NETWORK [Supply Chain Monitoring] The design of the network is based on the Segmentation of customers, products & suppliers for efficiency, speed and growth Include Sustainability as key principle of the design to ensure compliance to regulations and standards Connect these design principles with real-time Performance and Alert Management to provide end-to-end Visibility Supply Chain Control Tower Network Design Performance Mgmt Predictive Analytics Cloud fully integrated with on-premise investments Batch Traceability Serialization Food Safety, epedigree, Supply Chain Integrity Powered by SAP HANA 2014 SAP AG. All rights reserved. Internal 7
Integrated Business Planning Balance DEMAND Plans with NETWORK Constraints for Profitability Gain full Demand Transparency for short-, mid- and longterm on all levels of the Bill-of-Material by leveraging demand sensing and statistical forecasting methods Deliver a cross departmental Sales & Operations Plan balancing the impact on inventory, service levels and profitability Determine optimal Inventory Levels at each tier within the supply chain and automatically set targets for operational plans [Integrated Business Planning] Sales, Inventory & Operations Planning Sales & Operations Planning Inventory & Service-level Optimization Demand & Supply Planning Predictive Demand Management Response Management Cloud fully integrated with on-premise investments Powered by SAP HANA 2014 SAP AG. All rights reserved. Internal 8
Demand-Driven Supply Networks Sense & Shape DEMAND and Orchestrate the Fulfillment NETWORK Leverage Market & Customer Intelligence to benefit from market volatility and avoid waste in the demand network Establish Response Orchestration processes to support omni-channel strategies and coordinate the demand fulfillment Connect the business partners to the Business Network for supply chain collaboration processes to provide the flexibility, visibility and transparency needed to orchestrate the fulfillment [Demand-Driven Supply Network] Demand Sensing & Shaping Demand Signal Management Customer Activity Repository Hybris Omni Channel Cloud fully integrated with on-premise investments Supply Network Collaboration Ariba Business Network Manufacturing & Supply Orchestration Powered by SAP HANA 2014 SAP AG. All rights reserved. Internal 9
Logistics & Order Fulfillment DEMAND NETWORKS require speed & efficiency in Logistics & Order Fulfillment Make informed decisions to balance customer service and the cost of delivering that level of Customer Service Align integrated Distribution and Fulfillment processes around speed, efficiency and sustainability Connect all the participants of the Logistics Network and track the progress of the delivery: manufacturing companies, freight forwarders, carriers and consignees [Logistics & Order Fulfillment] Transportation Management Multi-mode Transportation for Shippers, Freight Forwarders & LSPs Extended Warehousing Dock Appointment Scheduling Labor Demand Planning Warehouse Management Powered by SAP HANA 2014 SAP AG. All rights reserved. Internal 10
managed cloud SAP Supply Chain Solution Strategy The Demand Network public cloud planning network monitoring Cloud fully integrated with on-premise investments SAP Business Suite (ERP, APO, ) on-premise logistics Powered by SAP HANA SAP FIORI 2014 SAP AG. All rights reserved. 11
SAP Supply Chain Solution Roadmap The Demand Network PLANNED Supply Chain Monitoring Cloud based Supply Chain Control Tower with focus on analytics and what-if simulation and on-premise Supply Chain Integrity Integrated Business Planning Extended Cloud S&OP solution, including Inventory Optimization and Predictive Demand Management, integrated with On-Premise Demand Sensing & Shaping Demand Driven Supply Network Cloud based offering of Direct Material Collaboration on the Ariba Network connected with SAP Supply Network Collaboration (on-premise or managed cloud) Logistics & Order Fulfillment Transportation Management for Contract Logistics and Warehouse Management extensions for Discrete & Asset Intensive Industries 2013 2014 2015 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 2014 SAP AG. All rights reserved. 12
Customer Testimonial SAP Sales & Operations Planning, powered by SAP HANA We were able to assess the impact of fluctuations in capacity positions at contract manufacturers on our sales forecasts in real-time, model alternative scenarios and cut our planning cycle time in half. The ability to do what-if scenarios on combined demand, supply and finance data, integrated analytics and contextual collaboration around key planning decisions are important differentiators. We are excited about the solution and look forward to rolling it out at McKesson. James Smith Director, McKesson Learn More 2014 SAP AG. All rights reserved. 13
SAP Enables the Transformation to Demand Networks Summary Supply Chain Monitoring Supply Chain Control Tower Supply Chain Integrity Integrated Business Planning Sales, Inventory & Operations Planning Demand & Supply Planning Demand Driven Supply Network Demand Sensing & Shaping Manufacturing & Supply Orchestration Powered by SAP HANA Logistics & Order Fulfillment Warehouse Management Transportation Management 2014 SAP AG. All rights reserved. Internal 14
Thank you Contact information: Hans Thalbauer Senior Vice President, Supply Chain, SAP Hans.Thalbauer@sap.com