5 - Supply Change Management - SCM 7.0

Antonella Squadrito – SCM Business SolutionEngineer

SAP Business Suite 7

© SAP AG 2009. All rights reserved. /

Today’s Trends and New BusinessReality

ErodingCustomerTrust

PoorDecisions

Lack ofCustomerConfidence

CostPressure

Operations inUncertainty

UnexpectedOpportunities

The Key: Convert Insight into ActionThe Problem: Disconnects within Business, IT

Business

Operations

Strategy and Execution Disconnects

Function and Process Disconnects

PLM SRM ERP SCM CRM

IT

Application DisconnectsCIO

Head, HR CFOCEO COO

VPProducts

DESIGN

VPProcurement

SOURCE

VPSupply Chain

SUPPLY MAKE

VPMfg

SELL

VPSales

SERVICE

VPService

Converting Insight into ActionProcess Excellence Vision:IT & Business aligned around processes

Strategy and Execution Aligned

Head, HR CFOCEO COO

Functions and Processes Streamlined

Applications Harmonized

CRMCRMERPERPPLMPLM SRMSRM SCMSCM

VPProducts

VPProcurement

MAKE

VPMfg

SERVICE

VPService

SELL

VPSales

VPSupply Chain

DESIGN SOURCE SUPPLY

SAP Business Suite7Insight to Action through Process Excellence

© SAP 2008 / Jim Hagemann Snabe/

SAP Business Suite

NetWeaverIntegration

NetWeaver CompositionBusiness Objects

EhP

SRM PLMSCMCRM ERP

EhP

Application Lifecycle Management, Identity Management


SAP Business Suite



EhP

EhP



IndustryAdd-OnCRM SRM SCM PLM ERP


SAP Business Suite



EhP

EhP

Pre-integratedIndustry specificProcesses

Flexible, ModularUpgrades to minimizedisruption

Continuous Innovationfor Line of Business InYour Industry

Continued SOAenablement andinnovation


More HarmonizedUI’s AcrossApplications andprocesses

Embedded analyticsfor contextualizedInsight

Best-Run NOWpackages tosolve immediatepain


For IncreasedUser

Productivity

IndustryAdd-On

For IncreasedBusiness andIT Efficiency

For ValueFocused FastDeployments

For informeddecision making

and Control

For flexible processand business agility

For faster, focusedsolution evolutionwith lower costs

For performanceadvancement in coreindustry processes

CRM SRM SCM PLM ERP

Global Industry Value

Industry Context

Spec

ific

Indu

stry

Add

ition

s Industry Aligned Processes

Intgrated ProductDevelopment

Advanced MeteringInfrastructure

CustomerService

Insurance ClaimsManagement

End-to-End Processes On One Platform Supporting Industry


SAP Business Suite



EhP

EhP

Pre-integratedIndustry specificProcesses

Flexible, ModularUpgrades to minimizedisruption

Continuous Innovationfor Line of Business InYour Industry

Continued SOAenablement andinnovation


More HarmonizedUI’s AcrossApplications andprocesses

Embedded analyticsfor contextualizedInsight

Best-Run NOWpackages tosolve immediatepain


For IncreasedUser

Productivity

IndustryAdd-On

For IncreasedBusiness andIT Efficiency

For ValueFocused FastDeployments

For informeddecision making

and Control

For flexible processand business agility

For faster, focusedsolution evolutionwith lower costs

For performanceadvancement in coreindustry processes

CRM SRM SCM PLM ERP

Lack of visibility beyond the four walls

Rising energy costs and increased regulations

Fear of poor customer service

Managing Change in Your Supply ChainGlobalization stretches supply chains and increases risks

Stock Price Behaviorin Days

Source: Prof. Vinod Singhal, GeorgiaInstitute of Technology

0

-10%

-20%

-30%

-125 0 125

SupplyChainGlitch

The Cost of a Supply Chain GlitchExecutives lack visibility and adaptability to respond tochange

Best-in-class supply chainshave 65% higher profitability

Supply chain glitcheswipe ~30% market cap

Profitability bySupply Chain Maturity

Immature Mature Best-in-class

1x

1.38x1.65x

Source: PRTM

Leverage Change as aCompetitive AdvantageIt is all about adaptability and managing the network

Improve collaborationTreat suppliers, customers and partnersas an extension of your organization

Increase efficiencyMaximize energy efficiency and minimizetransportation costs

Manage / control riskAnalyze each events operational andfinancial impact to both cost and revenue

Increase adaptabilityShorten planning cycles to increaseresponsiveness to supply chain events

Improve customer serviceSense and respond to real time supplyand demand signals

Leverage real-time dataObtain supply and demand data from RFID,POS and other sensory technologies

SAP SCMEnabling adaptive supply chain networks

Demand-drivensynchronization ofsupply to demand

Network-wide visibility,collaboration andanalytics

Sense and respondthrough an adaptivefulfillment network

Demand Driven Synchronization ofSupply to DemandImprove customer service by balancing push and pull planning processes

Sales and Operations PlanningCross departmental plan to balance demand and supply plan withinfinancial and strategic boundaries

Demand and Supply PlanningModel and set supply chain goals to ensure a profitable match of supply anddemand

Responsive ReplenishmentReal time visibility and replenishment processes driven by actual demand

APO DP (Demand Planning)

Comprehensive forecasting tool-setStatistical forecasting with causaland time-series methodsSelection of best-fit modelAutomatic outlier detection availableHighly configurable planning bookswith macro functionalitySupporting aggregation /disaggregation logicLifecycle planningPlan promotions separately from therest of your forecastTrack & monitor forecast accuracySeasonal planningCollaborative demand planning

Improved forecast qualityOne tool for power and business userConsolidated demand plan (differentregions, countries, departments, …)

Key BenefitsFeatures

Calculate and determine future demand to improve demand qualityand accuracy

VMI

APO

Integrate purchasing, manufacturing,distribution, and transportationConsider constraints and penalties toplan the product flow along thesupply chainAdvanced safety stock methodsconsidering multilevel supply chainnetworks and demand variabilitySupports system wide inventorymodeling and planningEnable planning on different levels ofdetail (aggregated planning)Choice of heuristic-, rule- oroptimization-based algorithm

Increased visibility over the overallsupply chainOptimized sourcing and capacityutilizationReduced inventory levelsImproved customer service

APO SNP (Supply Network Planning)


Calculates quantities to be produced and delivered to the locationsto match customer demand and maintain desired service levels.

APO PP/DS: Production Planning

Production PlanningDelivers a short term production plan that matches overall supply todemand, given available resources and production methodology.

Multi-level production planningCapable-to-PromiseUse existing or own developed

heuristicsSupports lot quantity calculations

and sourcingSupport the following Models:

Make to StockMake to OrderMake to Order with Order BOMEngineer to OrderProject ManufacturingFlow Manufacturing

Order PeggingIntegrated with the APO Alert Monitor

Determines how, when, and whereresources and materials should bedeployed to accomplish the productiongoalsMaster planning for materialsand capacity (resource loads)Realistic delivery date confirmations…


APO PP/DS: Detailed Scheduling

Detailed Production SchedulingDetermines optimal production sequence for execution, to meet deliverycommitments based on actual constraints on the shop floor.

Capacity-Load OptimizationOptimal SequencingFlexible & Graphical Activity

SchedulingBacklog Resolution PlanningWhat-if Analysis & SimulationForward & Backward SchedulingConfigurable Exception Alert MonitorPlan MonitorProduction Order ReleaseIntegrated with the APO Alert Monitor…

Optimal production sequence that isfeasible and can be executedAllows simulation of various planningscenarios to determine optimal scheduleOptimization based on actual constraintsensures reliable delivery due datepromises


Sense & Respond in anAdaptive Fulfillment NetworkDistribution, transportation, and logistics driven by real-time planning

Order Fulfillment (ATP)Track and monitor the entire fulfillment process

Promise based on availability in DC’s, production, warehouses and in-transit

Transportation ManagementPlan, optimize and execute the complete transportation process

Warehouse ManagementManage all warehouse activities to maximize process efficiencies

RFID enable sense and respond processes

APO TP/VS: Transportation Planning &Vehicle SchedulingDynamic Route Determination (Routing Guide)

Interactive and powerful decision support Order by OrderPrepare complex shipment execution

Vehicle Scheduling and RoutingConsolidate Orders, optimize routing and sequencing of deliveriesOptimize resource utilization and minimize workloadPlan and revise – focus on exceptions

Carrier OptimizationOptimize Carrier assignment for selected ordersIdentify continuous moves across multiple shipmentsRevise and reconsider continuously

Collaborative Capacity Planning with CarriersExchange expected daily number of shipments with CarriersGive Carriers access to your mid-term planning via the WebInformation used during Carrier Optimization

Collaborative Tendering of shipmentsTender via the Internet or via EDI or via….Carrier to adjust pick-up times and delivery times of shipments

APO gATP (global Available-to-Promise)

Rule-based ATP (alternativelocations, alternative products)Multilevel ATP (check oncomponents)Backorder processingIntegrated with PP/DS (checksagainst actual production plan andconsiders capacity constraints)Integration with Demand Planning(product allocation)Fast response through liveCache*use for ATP check

Meet the demand communicatedthroughout the supply chainBest sourcing for the availableinventories in the supply chainSell what you can actually sellIncrease customer satisfactionthrough reliable delivery datesHigher Requirements Visibility


* high performance, memory resident data processor to perform planning and optimization

Online information about the most recent state of plan allows orderpromising that will execute after the customers’ expectation

Network Wide Visibility,Collaboration and AnalyticsMinimize Supply Chain Risk within and beyond the Four Walls

Supply Chain AnalyticsMonitor and analyze the performance of your network in real time with pre-defined KPI’s

Supply Network CollaborationTreat suppliers, outsourcing partners, customers and service providers as anextension of your organization

Real World AwarenessLeverage sensory technologies to capture and turn real time data intoinformation

APO VMI (Vendor Managed Inventory)

Embed customers’ warehouses in theplanning processUse sophisticated SAP APO planningcapabilitiesBuilt efficient truck loadsCreate sales orders automatically inERP based on confirmed SAP APOstock transfer ordersDisplay in-transit inventoryUse standard IDOCs to integrate yourcustomer data (e.g. stock, demand)

Increased visibility of real customerdemandImproved usage of stock along thesupply chain and better transportplanningReduction of stock-outs, rush ordersand supply bottlenecksImproved cooperation to thecustomersImproved delivery service levelLower safety stocks


Allows efficient management of the supply chain by managing customerinentory replenishment with automated collaboration

APO Alert Monitor

First task of the day for aplanner: Check the existingalerts

Drill-down from the alertmonitor to the application tosolve the issue.

Powerful exception message system integrated in all SAP APOplanning modules

Embrace Change with SAP SCMImprove collaboration, win customer loyalty and operatemore profitably

LS Cable calculated P&L by product in 5 days instead of 20

Colgate-Palmolive improved on-time delivery from 70% to 98%

SI Corporation reduced finished goods inventory by 60%

Dow Corning reduced inventory by almost 20%

CM Forestry achieved 10% annual savings by improved planning

BDF Beiersdorf increased sales by 4% while cutting inventory 60%

Adaptive Supply Chain NetworksEnabling companies to compete profitably in a globaleconomy

Integration – Planning and Execution integrated bydesign to each other and your back-end systems

Innovation - Leverage Enterprise SOA to enable theadaptability to respond to ever changing supply chainchallenges and opportunities

Collaboration – Business processes that spandepartmental and company boundaries

Select SAP SupplyChain Management References

Avoided damage to million-dollar shipments

Reduced planning cycle time by 50%

Automated 90% of supplier orders

10% annual cost savings due to improved planningand distribution efficiency

Improved customer service by 5% (on time delivery)

Improved planning cycle times from 10days to 2 or 3 days

33% reduction in planning time and effort

¹Direct upgrade from these source releases to the go-to releases of SAP Business Suite 7 is supported by SAP.²If you upgrade from SAP CRM 4.0 or 5.0 to SAP CRM 7.0, customer-specific UIs (including the underlying UI-related coding) have to be migratedseparately.³Most industry and supplementary applications are shipped with the SAP Business Suite applications and are included in the respective upgrade. For theversions of industry and supplementary applications that are part of SAP Business Suite 7, but not shipped as part of SAP ERP, SAP SCM, SAP PLM,SAP SRM, or SAP CRM refer to "SAP Release Strategy for Large Enterprises“ on http://service.sap.com/releasestrategy.

So How do You Get toSAP Business Suite 7 if You’re Running …

Install SAP enhancement package 4 for SAPERP

SAP ERP 6.0

Upgrade and include SAP enhancementpackage 4 for SAP ERP

SAP R/3 4.0B¹and above

UpgradeSAP CRM 4.0¹,²and above

SAP SRM 3.0¹and above

Upgrade

SAP SCM 4.1¹and above

Upgrade

SAP PLM 4.0¹and above

Upgrade to SAP ERP 6.0 and include SAPenhancement package 4 for SAP ERP

SAP ERP 6.0 plusSAP enhancementpackage 4 forSAP ERP

SAP CRM 7.0

SAP SRM 7.0

SAP SCM 7.0

SAP Business S

uite 7³

SAP PLM 7.0

http://service.sap.com/releasestrategy.

Questions

Thank You for Your Time

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5 - Supply Change Management - SCM 7.0

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