SAP SNC Supply Network Collaboration

Sunil Srinivasan Enterprise Solution Architect SAP India

Agenda

1.Business Background and Big Picture 2.SAP SNC Product Overview 3.Customer Examples

Agenda

1. 2. 3.

Business Background and Big Picture SAP SNC Product Overview Customer Examples

Customer Challenges and Trends Drive Strategy for Supply Chain Collaboration
Manual partner interaction: expensive, error-prone and slow Supplier On/off boarding Lack of Visibility Beyond the Four Walls

Poor Customer Service

Globalization and Outsourcing

How Is SAP Addressing the Challenges Enabling Adaptive Supply Chain Networks
Globalization & Outsourcing
Understand the Customer Demand Include your Suppliers into your Network Enable visibility into your outsourcing partners

Visibility
Treat suppliers, outsourcing partners, customers and service providers as an extension of your organization

Improve Customer Service

Sense and respond to real time supply and demand signals

It is all about adaptability and managing the network SAP Network Supply Collaboration

Combining Efficiency & Responsiveness Develop and Leverage Core Capabilities in the Network
Collaborative Demand and Supply Planning

Streamline Logistics and Fulfillment

Increase Supply Network Visibility & Collaboration Manage Risk and Ensure Compliance Increase Real World Awareness

Success depends each Enterprise becoming Best in Class itself and leveraging the Best in Class capabilities of the Network

SAP Supply Network Collaboration A 360 View On Collaboration

Extend Your Enterprise to Encompass Suppliers, Contract Manufacturers and Customers

Out-of-the-Box Collaborative Business Processes Intuitive, Easy to Learn, and Easy to Use Web-User Interface Standards-Based & Service-Enabled Connectivity Between Your SAP ERP and Partner Systems

Suppliers
360 Collaboration

Customers

My Company

Contract Mfg

Agenda

1. 2. 3.

Business Background and Big Picture SAP SNC Product Overview Customer Examples

What is SAP SNC?

Its a supply chain collaboration application, but it has several different dimensions: Collaboration & Visualization Layer to External Partners
Show e.g. POs, Forecasts and Inventory from internal systems (ERP), encompassing the use of exception management. Extending processes running in internal systems. Allow partners to update information and respond back to internal systems (e.g. PO confirmations, ASNs, Forecast Responses). Collaborate and capture commitments from partners. Consolidate many internal systems into one SNC system, provides one comprehensive, simplified and consolidated view to the outside world.

Enabler of New Business Processes on top of Internal Systems

Responsive Replenishment (next-gen VMI), Work Order collaboration with contract manufacturers and Supply Network Inventory providing cross-tier/cross-partner visibility to supply, demand and inventory that go above and beyond what ERP systems provide. New processes integrate to existing internal (ERP) systems on buy and sell side, adding process value.

Multi-Mode Communication Layer to External Partners

Message-Based Communication like XML (B2B), File Sharing (Excel up/downloads), E-mail exchange w/ attachments and web UI allow a menu-based approach to reach full range of external partners. Is fully eSOA-enabled, utilizes NetWeaver PI (BW & EP optional) on top of WAS and using a web-based UI

SAP SNC Key Capabilities: Supplier Raw Mats/Components, Contract Mfg and Customer Collaboration
Finished Goods Flows Responsive Replenishment Min/Max VMI Demand Collaboration

My Company
Raw Material/Component Flows PO Process Release Process CMP (Subcon PO) Process Kanban Process Work Order Process SMI Process SNI Process DCM (Reorder) Process DR (Forecast) Process Contract Mfg:ing Flows

Key Capabilities: Raw Mat/Component Supply & Contract Mfg

My Company
Raw Material/Component Flows PO Process Release Process CMP (Subcon PO) Process Kanban Process Work Order Process SMI Process SNI Process DCM (Reorder) Process DR (Forecast) Process Contract Mfg:ing Flows

Additional Features:
Cross-tier Visibility of Demand and Inventory Enabled Via SNI. WO Allows for Automated Production Progress Updates Invoices (Supplier Creates Invoices via the Web), Includes Regular and ERS Invoices (Self-Billing) Alerts for Exceptions (Includes e-mail notifications) BW Reporting Content for Alerts and Supplier Performance based on Alerts

Supplier Collaboration with SAP SNC All Suppliers Are Not Equal
Top Strategic Suppliers
Automated, optimized communication (e.g., EDI) with typical business pain points, such as: High spend, high-volume large suppliers Expensive connectivity efforts Poor visibility of mid/long-term forecasts, inventory, and capacity Low supplier performance accuracy Disconnect between public and private processes

Non-Strategic Suppliers
Unstructured, not optimized communication (e.g., Phone, Fax) with typical business pain points, such as: Unsynchronized supply and demand situation Long order cycle times Disruptions from last-minute changes Immense maintenance efforts of data High supply risk and costs

Low spend, low-volume small suppliers

Reaching Long Tail of suppliers requires multiple modes of connectivity

BUSINESS PARTNERS
Suppliers and Contract Mfg:ers
Low Volume Web Browser
Web Web Browser Browser

CUSTOMER
SNC
SAP NetWeaver

Mid Volume File Up/Down Loads

Up/Down Up/Down Load Files Load Files

SAP XI

ERP Backend Systems

High Volume B2B Integrated

Backend Backend System System

Browser XML File Up/Down Load

Kanban Dashboard
The DIMP Kanban Board displays Control Cycles for materials supplied through different suppliers.
Create a new Kanban Jit Call

Supplier: AAT_BAMBE Supplier: AAT_TROY

Customer Collaboration with SAP SNC

Forecast Collaboration Promotion Planning Forecast and Short Inventory and Sales Term Forecast History

My Company

Replenishment Orders Planning

Promotion Orders

Truck Loads (PO and Sales Orders)

Customers

Responsive Replenishment . . .
Is a real-time, demand-driven, replenishment scenario between supplier and customer including up and down shifts of orders and shipments in the short term (next generation VMI) Manages promotional items separately thru-out end-to-end replenishment process and optimizes truck loads

VMI Min/Max Replenishment . . .

Allows for traditional VMI replenishment scenarios using maximum and minimum stock limits as driver Can be used without promotional and truck load building functionality

Demand Forecast Collaboration. . .

Offers a time bucketed, on-screen, collaboration and workflow driven capability to reach a consensus forecast between customers and suppliers

Main Features: Customer Collaboration Benefits

Business Benefits
1. Controlled Data Import 6. Order Processing & Delivery 2. Responsive Forecasting

5. Order Generation 3. Responsive Promotion Planning

Increased sales and lower lost sales through prevention of stock-outs, especially during promotions Improved responsiveness to short-term fluctuations to customer demand esp. during promotions Increased cash-flow through reduced inventory and faster order cycle times while increasing service levels Improved asset utilization through higher truck capacity utilization and increased user productivity

4. Replenishment & Transport Load Building

IT Benefits
Pre-delivered scenario and lean implementation SAPs platform for Supply Network Collaboration (incl. customer & supplier Collaboration scenarios e.g. SMI, CPFR)

Supply Network Collaboration

Improved Collaboration
Collaborate in real time Fewer phone and fax inquiries Automated Processes

Enhance Visibility
Supply Network visibility Anticipate supply delays Respond to demand changes

Increase Control
Management by exception Manage risk Better capacity utilization

Improve Customer Service

Increase order fill rates

Lower costs & increased revenues

Reduced inventory levels Faster order-to-cash cycle Increased inventory turns Improved asset utilization

Agenda

1. 2. 3.

Business Background and Big Picture SAP SNC Product Overview Customer Examples

SAP SNC (ICH) Reference Customers Feb 2009

Customer Snapshot:
460 + Global Customers 200 + Active Customers Appr.75 Live Customers Appr.25 Reference Customers

Notable Live Customers SAP SNC

Honeywell Colgate Embraer GE (Fanuc) Bell Helicopter Grundfos Roche Diagnostics Knorr-Bremse Nobel Biocare DirecTV Kraft Foods Flextronics BEML Kaeser Kompressoren

Thales Avionics P&G Sauer-Danfoss Sidel Alpine Electronics General Mills HP Kostal Novartis Philips Ritter Sport Weber Grills Rohde & Schwarz Festo

Medtronic Unilever Hindustan Kellogg Eli Lilly Cartier-Richmont Hans Grohe Wincor Nixdorf Mahle Bang & Olufsen Harman Becker Daikin Johnson & Johnson Consmr. Bayer

Notable In-Project Customers SAP SNC (OSS message-based)

Ericsson Conair Coca-Cola Unilever England Rockwell Automation Yazaki Automotive Draeger Eli Lilly (upgrade) Ford LOrange Nortel Networks Philip Morris Siemens AstraZeneca Lexmark Lockheed Martin Perrigo Endwave Lennox Roto Frank Caterpillar Honeywell Melitta Osram Sappi Whirlpool Palm Pepsico Applied Materials Lexmark Eli Lilly Kimberly-Clark Johnson & Johnson Medical Daimler HP (roll-out) Nestle Panasonic Shell Novo Nordisk

SAP SNC / Manufacturing Network Planning and Execution Selected Customer Examples
Suppliers are responsible for inventory management processes Increased visibility across the supply chain Automated key business processes with suppliers resulting in high data and decision accuracy Integrated four Baan ERP systems to one SNC instance using web services provided by SAP On-Boarded 10,000+ Suppliers and 12,500+ Supplier Users in 2 years (March 2009)

Bang & Olufsen

Flextronics

DIRECTV

Increased supply chain velocity and volume Reduced data and decision latency 3 5 times improvement in purchase order productivity

Philips Consumer Products

Increased automation reduces manual effort ( for example: Goods Receipt Process) Non-sophisticated suppliers are able to get official ASN

Customer example: Supplier Collaboration @ Flextronics

Why SAP and enterprise SOA
Flextronics Inc. Location: San Jose, CA Industry: Computer Products and Services: Electronics Manufacturing Services (EMS) provider Revenue: US$33.6 Billon (2008) Employees: 162,000 (Mar 2008) Web Site: http://www.flextronics.com SAP Solutions and Services: SAP SNC 5.0, eSOA Proof-of-Concept Partner: none

1/2

SOA enabled multiple interaction points (Excel, B2B, etc.) over a single process Easily configurable solution: separation of process steps from the services allows for easy reconfiguration of the process later

Benefits (of eSOA for this effort)

SOA opens the doors for fast and easy integration into third party services and solutions, both from in-house run applications or software sourced as a service

Challenges and Opportunities

Build a consistent, repeatable,

Legacy supplier collaboration platform not scaling with Flextronics growth Solution instability impacting business and supply chain efficiency

synergistic and scalable operational infrastructure that hosts the market segments in each of the major geographies and drives focused execution/
Josh Clark Director of IT Flextronics Inc.

Objectives
Increase buyer / supplier performance Reduce purchasing transaction cost Increase supply chain data integrity, availability and visibility Improve operational efficiency

Customer example: Supplier Collaboration @ Flextronics

Flextronics Inc. Location: San Jose, CA Industry: Computer Products and Services: Electronics Manufacturing Services (EMS) provider Revenue: US$33.6 Billon (2008) Employees: 162,000 (Mar 2008) Web Site: http://www.flextronics.com SAP Solutions and Services: SAP SNC 5.0, eSOA Proof-of-Concept Partner: none

2/2

Implementation Highlights PO Collaboration Web-based collaboration tool that manages the full Purchase Order lifecycle
Dynamic Replenishment Web-based collaboration tool that manages the Forecast process Exception Management ERP based exception reports that enables buyers to manage POs by exceptions Exchange Infrastructure (XI / PI) EAI/B2B middleware which enables integration among various applications and supply chain partners POC to assess robustness and scalability of SAP Supply Network Collaboration

Build a consistent, repeatable,

synergistic and scalable operational infrastructure that hosts the market segments in each of the major geographies and drives focused execution/
Josh Clark Director of IT Flextronics Inc.

Statistics (Apr 2008)

Transaction volume of 200K per week Penetration: 36 Sites Supplier Locations: 4300 Supplier Partners: 2000

Thank you!

SAP 2008 / Page 25

Copyright 2009 SAP AG All Rights Reserved

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iSeries, pSeries, xSeries, zSeries, eServer, z/VM, z/OS, i5/OS, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Adobe, the Adobe logo, Acrobat, PostScript, and Reader are either trademarks or registered trademarks of Adobe Systems Incorporated in the United States and/or other countries. Oracle is a registered trademark of Oracle Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warrant.