Delivering Real-Time Business Value for Mill Products

July 2013

Delivering Real-Time Business Value for Mill

Products SAP Business Suite Powered by SAP HANA

Public

2 © 2013 SAP AG or an SAP affiliate company. All rights reserved.

The real-time opportunity

Mill companies are facing stiff international

competition in times of strained liquidity and volatile

commodity prices – while customers are willing to

shop for best prices, terms, and conditions.

Manage production and logistics to win in a commodity market

Achieve maximum return on assets and increase margins

Fulfill customer order expectations at low cost

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 3 Public

Profit-driven

supply chain

Supply chain planning with real-time insight into

demand, supply, and capacity

Global inventory visibility and order promising to keep

inventory low and maximize on-time fulfillment

Plant and asset

operations

excellence

Manufacturing and asset visibility and performance

for sustainable asset operations.

Asset optimization and maintenance operations for

maximum reliability and utilization

Sustainable

customer

relationships

Order and contract management for configurable

products for differentiated offerings and customer-

focused services.

Differentiate in the commodity markets Align business operations with customer needs


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Industry value map for mill products Differentiate in commodity markets

Profit-Driven Supply Chain

Sales and Operations Planning

Supply Chain Planning

Supply Chain Execution and Transportation

Commodity Procurement and

Price Risk Mitigation

Sustainable Customer

Relationship

Profit-Driven Segmentation

Sales Enablement

B2B E-Commerce and Self-Service

Order and Contract Management for

Configurable Products

Plant and Asset Operations Excellence

Manufacturing and Asset Visibility and Performance

Manufacturing Operations and Genealogy

Asset Optimization and

Maintenance Operations

Operational Risk Management

People and

Talent Core Human Resources and

Payroll Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing and

Contracting

Procurement and Order

Collaboration Collaborative Invoice to Pay

IT Management Application Lifecycle

Management IT Infrastructure Management

IT Portfolio and Project

Management IT Service Management IT Strategy and Governance

Inventory Visibility and Order Promising Energy and Environmental

Resource Management

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Development and

Integration


Industry value map for mill products Real-time value for key end-to-end processes

Profit-Driven Supply Chain

Sales and Operations Planning

Supply Chain Planning

Supply Chain Execution and Transportation

Commodity Procurement and

Price Risk Mitigation

Sustainable Customer

Relationship

Profit-Driven Segmentation

Sales Enablement

B2B E-Commerce and Self-Service

Order and Contract Management for

Configurable Products

Plant and Asset Operations Excellence

Manufacturing and Asset Visibility and Performance

Manufacturing Operations and Genealogy

Asset Optimization and

Maintenance Operations

Operational Risk Management

People and

Talent Core Human Resources and

Payroll Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing and

Contracting

Procurement and Order

Collaboration Collaborative Invoice to Pay

IT Management Application Lifecycle

Management IT Infrastructure Management

IT Portfolio and Project

Management IT Service Management IT Strategy and Governance

Inventory Visibility and Order Promising Energy and Environmental

Resource Management

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Development and

Integration

Highest real-time

business value for

mill products


Today

With SAP Business Suite on

SAP HANA

KPI improvements are high-level estimates and will have to be validated for each customer situation.

Supply chain planning Business value for supply chain monitoring

Lack of near real-time information

Batch jobs to extract data from

planning system for central reporting

typically on weekly basis

No ad-hoc operational reporting

Reporting, queries, dashboards that

have to be created by each customer

Time-consuming data loads in

traditional reporting tools

Not possible to run sub-daily planning jobs and analyze the results because of the long data-preparation times

Inability to respond fast to ad hoc queries from customers, which may result in lost sales

Decision support based on near real-

time information

Information can be updated using

delta capabilities

Out-of-the-box analytical reporting

scenarios provided with streamlined

data load

Planned ability for customers to add

their own KPIs and dashboards

Advanced data retrieving and

computing functionalities of SAP

HANA are used to optimize the

reporting of supply chain planning

data

Reduce overall supply chain

planning cost by

10%

Decrease

Increase

cycle time for

forecast by

10%

on-time delivery

performance by

5%


Today


SAP HANA


Inventory visibility and order promising Business value for inventory (warehouse) management

No up-to-date view of the

inventory situation

Need for accurate display of actual

stock to react quickly to stock

shortfalls

Time-consuming inventory

management reporting

Real-time access to complex

inventory management data

New analytical inventory

management cockpit

Real-time stock insight and inventory

monitoring

Real-time access to complex

inventory management data

High-performance inventory management with large volumes of documents

Higher process efficiency in adjacent procurement processes (such as purchase order or invoice processing)

Reduce Obsolete inventory

by

8%

Increase

Reduce

Inventory accuracy

by

5%

inventory carrying

cost by

6%


Today


SAP HANA


Manufacturing and asset visibility and performance Business value for asset planning and scheduling

Maintenance scheduling that

consumes a great deal of time

High amount of master data

influences performance of data

maintenance

Manual and error-prone process for

preselection of maintenance plans

Potential for objects needed for

maintenance calls to be missing

High number of maintenance plans

that need to be scheduled frequently

leads to a weekly scheduling scheme

Accelerated mass transactions

Instant analysis of top of transactions

Preselection of due plans, speeding

up the process significantly

Real-time analytics on all data,

including machine sensor information

Scheduling of all maintenance plans

within a specific time frame

Planning several times a day

(instead of once a week) results in

up-to-date scheduling information in

maintenance operations

Faster response times lead to more-

accurate maintenance scheduling

Increase return on assets by

10%

Cut

Reduce

MRO inventory by

11%

unplanned downtime

or outages by

16%


Today


SAP HANA


Manufacturing operations and genealogy (1/2) Business value for material requirement planning

Periodic material requirement

planning (MRP) runs and

outdated results


Inability to replan quickly if conditions

change due to long run times

Limited order window

(9 a.m. to 5 p.m.)

Short planning periods (5 to 7 days)

Only delta planning

Simple product BOMS

No holistic production planning

across all relevant production sites

Faster replanning allowing more

frequent MRP runs in shorter cycles

Flexible response to market changes

Simulation of different what-if

scenarios in real-time

Extended order window

(8 a.m. to 8 p.m.)

Extended planning periods

(14 to 30 days)

Full product portfolio

Complex materials and BOM

Cross-plant planning

Faster MRP

Run-time savings:

50%

Increase

Reduce

customer service

levels

38%

out of stocks

36%


Today


SAP HANA


Manufacturing operations and genealogy (2/2) Business value for operational and ad hoc reporting

Lack of insight into important

company data resulting in duplication

of effort, errors in data consolidation,

and customer sales misquotes


High cost of IT maintenance cost

High cost of support queries

Costly and time-consuming support

for two separate servers for

operational and ad hoc reporting and

transactional enterprise system.

Simple reporting taking long hours to

generate

Inability to detect issues and

deviations quickly enough for senior

management to perform exception

management

Common and customer-defined views across CRM, financials, and logistics data, enabling faster reconciliation and drill-through and fewer misquotes

Flexible aggregation and slice and dice of real-time data

Tables and views exposed to power

users for building ad hoc reports for

analysis, thereby ensuring self-

service for key users

Reduction in support queries as

business can perform first-level

analysis before approaching IT

Faster reaction to demand changes

with faster report generation

Ability to provide early insights into

deviations and risks to so that

management can take corrective

measures

Productivity Overall time savings:

30%

IT cost

Reporting

Lower maintenance

costs by

33%

Speed up run-times

by

98%


Today


SAP HANA


Asset optimization and maintenance operations Business value for asset planning and scheduling

Maintenance scheduling that

consumes a great deal of time

High amount of master data

influences performance of data

maintenance

Manual and error-prone process for

preselection of maintenance plans

Potential for objects needed for

maintenance calls to be missing

High number of maintenance plans

that need to be scheduled frequently

leads to a weekly scheduling scheme

Accelerated mass transactions

Instant analysis of top of transactions

Preselection of due plans, speeding

up the process significantly

Real-time analytics on all data,

including machine sensor information

Scheduling of all maintenance plans

within a specific time frame

Planning several times a day

(instead of once a week) results in

up-to-date scheduling information in

maintenance operations

Faster response times lead to more-

accurate maintenance scheduling

Increase return on assets by

10%

Cut

Reduce

MRO inventory by

11%

unplanned downtime

or outages by

16%


Today


SAP HANA


Order and contract management for configurable products Business value for operational and ad hoc reporting











transactional enterprise system


generate




management



Tables and views exposed to power users for building ad hoc reports for analysis, thereby ensuring self-service for key users

Reduction in support queries as business can perform first-level analysis before approaching IT

Faster reaction to demand changes with faster report generation

Ability to provide early insights into deviations and risks to so that management can take corrective measures


30%

IT cost

Reporting

Lower maintenance

costs by

33%

Speed up run-times

by

98%


Today


SAP HANA


Accounting and financial close Business value for operational and ad hoc reporting











transactional enterprise system.


generate




management



Tables and views exposed to power users for building ad hoc reports for analysis, thereby ensuring self-service for key users

Reduction in support queries as business can perform first-level analysis before approaching IT

Faster reaction to demand changes with faster report generation

Ability to provide early insights into deviations and risks to so that management can take corrective measures


30%

IT cost

Reporting

Lower maintenance

costs by

33%

Speed up run-times

by

98%


Today


SAP HANA


Treasury and financial risk management Business value for financial and managerial reporting

Risk of noncompliance due to

unfulfilled (overruns in) audits

Decision-relevant information not

readily available

Data analysis not supported or

automated

High market volatility, which requires

real-time analytics to quickly react on

financial exposures

High cost of finance operations due

to missing central database

No single source of truth available for

exposure determination

Large number of time-consuming,

and non-value-added processes

required to provide (access)

accurate, up-to-date information

Flexible data aggregation in SAP

NetWeaver Business Warehouse,

including slice and dice of real-time

data

Multiple data layers that allow new

dimensions of forecasting, planning,

and simulations such as what-if

analysis and working capital

optimization

Starting point to build analytical applications providing KPIs to CFOs and head of treasury

Central control of organization, including traceability of business events, which is essential for external auditing

Increase

drill-down levels by

5%

Reduce

Decrease

treasury and cash

management costs

by

7%

compliance and risk

management costs

by

10%


Customer cases

EMEA mill products

company

• SAP HANA software and SAP HANA

Platform

• Fraud prevention

• Supply chain execution and transportation

management

• Manufacturing and asset visibility and

performance

US$38 million

benefit over

five years


Next step Business scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover the customer-specific business

improvement areas and quantify value potential.

We suggest such a workshop with your

line-of-business and IT experts.

As a starting point, we recommend a performance

and usage analysis of your current software

system.


Customer case: EMEA mill products company Summary validated scenarios

Feasibility

Bu

sin

ess v

alu

e

Legend

Lo

w

Hig

h

Low High

SAP Business

Suite on SAP

HANA

SAP HANA

products

SAP HANA

Platform

Annual revenue: US$14 billion

Fraud prevention

(0.5% of revenue) Transportation

management on

SAP HANA

(2%-3% reduction)

Real-time plant and

profitability modeling

Operational and Ad

Hoc Reporting

(20% Cost Savings)

Operational and ad

hoc reporting

(20% cost savings)

SAP HANA platform: customer specific

SAP HANA products: SAP NetWeaver BW on SAP

HANA , high-performance applications (HPAs), apps

powered by SAP HANA

SAP Business Suite on SAP HANA

Scenario

(business value)

1 Short term

Transportation management: Supply chain execution

and transportation

Operational and ad hoc reporting and analysis: Build

an analytics platform for mobile sales reporting and

plant maintenance

Operational data mart: Build an agile data mart

platform for operational and ad hoc reporting in sales

and management reporting

2 Medium term

Enterprise risk and compliance: Fraud prevention

Plant and asset operations excellence: Model the

whole production process

3 In evaluation

Other functions – to be discussed in future discovery

workshops

SAP HANA use cases mapped to industry value map end-to-end solutions Phase – deployment road map


Customer case: EMEA mill products company Summary validated scenarios

-2.667

-32450

5333

68000

-40.000

-20.000

0

20.000

40.000

60.000

80.000

2013 Phase 1 Phase 2

Costs SoH Applications Platform

Anything built on the platform that is customer specific ‒ new business processes and business models

SAP NetWeaver BW on SAP HANA, HPAs, apps powered by SAP HANA – mapped to IVM E2E solutions

€

Currently available functionalities (SP0, 1, 2); 23 scenarios mapped to IVM E2E solutions; and planned capabilities (All of the

end-to-end solutions on the industry value map are in scope.)

Actual SAP customer

business case

Annual benefits, SAP HANA

platform : €68 million

Annual benefits, applications

powered by SAP HANA: NA

Annual benefits, SAP Business

Suite on SAP HANA: €5.3 million

Estimated deployment costs

Total transition cost: €35 million

SAP HANA Platform

SAP HANA products

SAP Business Suite on

SAP HANA

SoH = SAP Business Suite on SAP HANA


Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

sessions and may not be completely validated.

Innovation scope

SAP HANA Platform (customer specific)

E2E solution

Mill products - enterprise risk and compliance

management

Value potential 4

Feasibility 3

Steel producer – fraud prevention Mill products

Business context and goals

The company has a set of processes to identify and prevent fraud. They proved to be ineffective,

however, due to disconnected processes and an inability to analyze available sources of

operational data.

Business challenges

Prevention of fraud needs fast reaction on known patterns of suspicious and fraudulent activity,

based of different sources of information. There is no capacity to connect data and make analysis

in real time to prevent losses proactively.

Process innovations

Integrate fraud monitoring processes, leverage historical data to identify fraud, and act in real

time (instead of reactively, when loss recovery is much more difficult).

Contribution of SAP HANA

Real-time automated analysis of big volumes of data from different sources.

Value drivers/KPIs

Prevent profit loss due to fraud. Low High

1 5

Low High

1 5




Innovation scope


E2E solution

Mill products – operational reporting

Value potential 4

Feasibility 3

Customer case: North American building materials company –

operational and ad hoc reporting Mill products


The company has a set of processes to identify and prevent fraud. They proved to be ineffective, however,

due to disconnected processes and an inability to analyze available sources of operational data.

Business challenges

Sales: Sales force requires mobile access to customer data to make customer meetings more effective.

Previous reporting, based on monthly reports, required many manual steps to be performed each month.

Plant maintenance: Relies on reactive maintenance process based on data from SAP ERP, SAP

NetWeaver BW, and legacy software. Plant maintenance required standardized reporting across all plants

to reduce machine/line downtime and improve compliance ratio to improve productivity.

Process innovations

Flexible mobile sales reporting via iPad on-demand

Senior-level formatted customer reporting and detailed data drill-down functionalities for the sales force

Common key metrics in plant maintenance across all plants, from SAP and non-SAP data sources

Maintenance reporting on near real-time data in a visual format enabling easy monitoring of KPIs and

performance across the board

Contribution of SAP HANA Value drivers/KPIs

• 3x improved compression rate

• Zero latency customer reporting available anywhere

• Consolidation of real-time customer data vs. monthly

updates

• Root-cause analysis of maintenance issues

• Very intuitive visual format combines several

reporting requirements on one dashboard

• Higher customer satisfaction

• Better margins

• Increased machine/line uptime

• Improved compliance ratio

• Improved productivity

• 99% faster reporting

• 6,800x faster table segmentation

• Eight-week implementation

Low High

1 5

Low High

1 5




Innovation scope


E2E solution

Mill products – operational reporting

Value potential 4

Feasibility 3

Customer case: North American metal company –

operational and ad hoc reporting Mill products


Business spends too much time building spreadsheets instead of analyzing and making

important financial and operational decisions.

Business challenges

Wasted time, lack of confidence in data, and inability to respond to changes in data. Complex

Microsoft Excel worksheets with limited visualization functionalities.

Process innovations

Information at the fingertips of end-users (CEO, business analysts, and common users).

Demonstrate real-time data and instantaneous reporting and analysis. Allow users to create

own reports.

Extract and report on global controlling data in 30 seconds.

Gain instant value from new data model: years worth of margin analysis data calculated in 10

seconds; refresh annual sales data in 2 seconds

Entire project took only four weeks.


53:1 data compression ratio

Query times in microseconds

Developed with drag-and-drop tools

Easier to use WEBi, Visi, and Explorer BI tools for end users

Value drivers/KPIs

Cost savings of nearly 20% annually

CEO and CFO are thrilled

Low High

1 5

Low High

1 5




Innovation scope


E2E solution

Manage and optimize transportation cost

Value potential 4

Feasibility 3


SAP Transportation Management (SAP TM) on SAP HANA for railway transportation

Business challenges

Many difficulties on Russian Railways’ side, but definitely also a big improvement potential on the

customer’s side: no single system for transportation planning and execution; high transportation

costs (payments for external fleet, payments to railways); inability to plan exact dates (or short

range) for delivery to customer; long order-to-delivery cycle; inability to optimize production stock

(in port terminals, on the way to terminals and customer); inability to increase efficiency in

accounts receivable and payables.

Process innovations

Whole chain of transportation ‒ from long-term planning through operative planning, execution,

dispatching, and cost analysis ‒ integrated with system of Russian Railways and ERP


Ability to analyze large amounts of data stored in memory and make fast decisions

Value drivers/KPIs

Transportation costs:

– Decrease cost of external fleet for raw materials transportation: US$5 million

– Decrease penalties from fleet operators for cars standing idle: US$0.2 million

– Increase fleet turnover: US$0.2 million

– Decrease penalties for idle standing railcars on the railroad: US$0.03 million

Low High

1 5

Low High

1 5

Customer case: EMEA mill products company –

supply chain execution and transportation management Mill products




Innovation scope


E2E solution

Mill products - manufacturing and asset

visibility and performance

Value potential 5

Feasibility 3


Need to model the plant operations and profitability with real-time visibility

Business challenges

Very large and granular volume of data to be modeled in the production process and profitability

calculation

Process innovations

SAP HANA Platform will allow accurate, aggregated, and real-time visibility of plant production

and profitability.


SAP HANA will also allow what-if simulation in real time to allow the business to react to events

in real time (for example, machinery breakdown or late delivery of raw materials).

Value drivers/KPIs

Increased operating profit

Aluminum smelter – real-time plant and profitability modeling Mill products

Low High

1 5

Low High

1 5

Delivering Real-Time Business Value for Mill Products

Business

Transcript of Delivering Real-Time Business Value for Mill Products