Digitising The Extended Supply Chain

Digitising The Extended Supply Chain

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Description: 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.

 
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Contents:
Digitising the extended Supply Chain:
SAP Supply Chain Strategy and Solution Innovations for Integrated
Business Planning
SAP Forum Lausanne
13 June 2016

Patrick.Crampton-Thomas@sap.com
SAP Solution Management, Head of Response and Supply Orchestration
February 2016

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.

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

2

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

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.

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4

Opportunities for digitized supply chains
49%

37%

Supply Chain Executives said that
digital supply chain will be both
disruptive and important within the
next three years

Said their organization has a
strategy for how digital
manufacturing will enable
competitiveness

Source: SCM World’s 2014 Chief Supply Chain Officer survey

Source: Digital Manufacturing & Design Innovation Institute

80%

13%

Said that digital operations are
critical of every organizations
manufacturing competitiveness

Said that their organization has
digital manufacturing capabilities
today

Source: Digital Manufacturing & Design Innovation Institute

Source: Digital Manufacturing & Design Innovation Institute

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

5

Digitizing the Extended Supply Chain

Resource Scarcity

People &
Resources

Suppliers &
Logistics

Sharing Economy

Sustainability

Business Network

Individualized Products

Customer Centricity

Industry 4.0

Omni-Channel
Products &
Assets

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Customers &
Markets

Internal

6

Customer Centricity

Omni-Channels

45%
of enterprises are building
direct-to-customer
fulfillment capabilities
Source: SCM World’s 2014 Chief Supply Chain
Officer survey

Demand Sensing
Same-day Delivery

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

7

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

Demo
© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

8

Individualized Products
Industry

4.0

80%
of companies said that digital
operations are critical of
every organizations
manufacturing
competitiveness

Configured

Products
Lot-Size of

1

Source: Digital Manufacturing & Design Innovation
Institute

Digitized Inventory

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

9

Sharing Economy
50%
of networked companies are
more likely than their peers to
have increased sales, higher
profit margins, and be market
leaders

Project

Network

Product

Networks

Strategic

Sourcing
Asset

Network

Source: McKinsey

Response

Network

40%
Growth in adoption of
business networks last 2 years

Logistics

Network
Manufacturing

Networks

Source: Technology Adoption Report on Business Networks, Ardent Partners, 2015.

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

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10

Resource Scarcity

64%

Environmental

Responsibility

Steady rise of cost savings as justification for

investments in Environmental Responsibility

of companies say that
priority access to scarce raw
materials/capacity and
collaborative cost reduction
with suppliers are extremely
relevant to their competitive
advantage

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Risk Management

Talent Acquisition

Joint risk mitigation with suppliers drives

Talent acquisition and development

ability to leverage supply chain disruptions

Source: SCM World’s 2014 Chief Supply Chain Officer
survey

has become twice as hard since 2011

Internal

11

Digitizing the Extended Supply Chain

Resource Scarcity

People &
Resources

Suppliers &
Logistics

Sharing Economy

Sustainability

Business Network

Individualized Products

Customer Centricity

Industry 4.0

Omni-Channel
Products &
Assets

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Customers &
Markets

Internal

12

Simplified Solution Approach

SAP Fiori on any device
Public cloud
Business Network
Design
Plan

Extended
Supply Chain

Operate

Respond

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

Enabling Demand Networks

managed cloud

public cloud

Real-time Network Insights

Plan

Respond

Deliver

SAP Business Suite 4 HANA

SAP HANA Platform

on-premise

Plan




Sales, Inventory and Operations Planning
Demand Management
Demand Network

© 2016 SAP SE or an SAP affiliate company. All rights reserved.
2015 SAP SE or an SAP affiliate company. All rights reserved.

Respond




Response and Supply Management
Production Planning and Scheduling
Response Network

Deliver




Warehouse Management
Transportation Management
Logistics Network

Internal

14
14

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

SAP Integrated Business
Planning

Built on SAP HANA
Demand Networks require real-time monitoring and a focus
on short-term planning and scenario simulation

Enhanced User Experience

One Harmonized Data Model
Avoid any latency due to integration efforts and leverage the
SAP ERP data model

New Planning Algorithms
Leverage predictive analytics (e.g. demand sensing)
algorithm in combination with optimization

Supply Chain Control Tower

Sales & Operations Planning

Inventory

Demand

Response & Supply

SAP HANA Platform

Cloud First Approach
The solutions will be provided in the SAP Cloud but also be
made available on-premise
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

Integrated Business Planning Evolution
FUTURE+
2016
Today
2014
2013
IBP 4.0

IBP 5.0

IBP 6.x

IBP 7.0++

2012
S&OP 3.0
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

New HANA Cloud
Integration model
Integration content for
ECC, APO, EIS
Extended S&OP
Functionality

IBP for Inventory
Supply Chain
Control Tower
IBP for Supply
Gartner MQ:
Leadership
Quadrant

IBP for
Demand
Further
enhancements
to each
module
100+
Customers

IBP for Response
& Supply

IBP and S/4HANA
advanced workflows

Order-based data
model

Further industry
enhancements to all
modules

Closed loop
integration and net
Change replication

Integration with financial
planning

6.1, planned March
2016

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

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IBP has a growing customer base and is a proven platform
Consumer
Products

Chemicals

Mill
Products
& Mining
Manufacturing

Pharma
High Tech

Retail
© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Automotive

Services
Aerospace
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17

SAP Integrated Business Planning
Supply Chain Control Tower

Enhanced User Experience

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

SAP Supply Chain Control Tower
Increase end-to-end network visibility combining
planning, execution and network data

Supply Chain Control Tower

Sales & Operations

Inventory

Demand

Response and Supply

Intelligent alerting with resolution to increase ontime delivery performance
Collaborative framework for all players in the
supply chain to monitor performance and drive
continuous improvement

Central DC
Asia Pacific
Supplier

Distributer

Supplier
Local DC

Supplier

Customer

Supplier
Plant
Central DC
Europe

Supplier

Customer

Plant

Supplier
Plant

Customer

Local DC
Central DC
Americas

Customer

Retailer

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*
© 2016 SAP SE or an SAP affiliate company. All rights reserved.

SNC

TM

ERP

ERP

APO

APO

3rd Party

ERP

APO

3rd Party

EM
3rd Party

Internal

19

SAP Integrated Business Planning for demand

Supply Chain Control Tower

Sales & Operations

Develop more accurate mid-term
statistical forecasts

Inventory

Demand

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
When forecasting
all combinations of
Outbound SKU and inventory
Expediting
locations*

-35%

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

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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

SAP Integrated Business Planning for inventory
Improve customer service levels

Supply Chain Control Tower

Sales & Operations

Maximize efficiency of inventory and working capital

Inventory

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

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Customer service
levels lifted from
93.7% to 99.1

Internal

22

SAP Integrated Business Planning for response and supply
Strategic, Tactical and Operational supply planning
covering all time horizons in one solution

Supply Chain Control Tower

Sales & Operations Planning

Inventory

Demand

Response and Supply

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
40% Shorter Lead Times
With flexible rules-driven supplydemand matching
© 2016 SAP SE or an SAP affiliate company. All rights reserved.

5,6% Higher On-time Delivery
With integrated material and capacity
order planning and promising
Internal

23

IBP, APO and S/4 HANA
Benefits


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



SAP integrated Business Planning

New Rapid Deployment Solution for IBP
enables deployment in 10-12 weeks

Supply Chain Control Tower

Sales & Operations Planning

Inventory

Response & Supply

Demand

APO Production
Planning and
Detailed Scheduling

APO SNP

APO DP & Demand
Signal Management

APO Global
Available to
Promise

SAP S/4 HANA Enterprise Management (SAP HANA)

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

24

S/4 HANA Outlook: Secure roadmap with integration of both
existing and new SCM solutions with S/4 HANA
Supply Chain Planning

Integrated Business Planning (IBP)

Supply Chain Execution Platform

(On Premise Deployment)

(New, Unified Platform for Cloud Deployment)

(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

Supply &
Response

SAP HANA Platform

Warehouse
Management

Transportation
Management

Track & Trace
SAP HANA Platform

S/4
© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

25

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 SE or an SAP affiliate company. All rights reserved.
© 2015 rights reserved.

Internal

26

Q&A

Contact Details
Patrick Crampton-Thomas
SAP Solution Management, Response
and Supply Orchestration

patrick. crampton-thomas@sap.com

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Internal

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