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Transcript of Dairy Presentation
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 1
Midmarket Dairy Industry
SAP™ ERP packaged solution for the dairy industry
Version: 11.01.2005
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 2
1. Challenges, Strategies and Benefits
5. Summary4. Value and Proof Points
2. The Solution 3. SAP™ ERP packaged solution for the dairy industry
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 3
1. Challenges, Strategies and Benefits
5. Summary4. Value and Proof Points
2. The Solution 3. SAP™ ERP packaged solution for the dairy industry
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 4
Farmer Tank Truck
DairyProduction
Retailer
Dairy
Cooperatives Authorities External Laboratories
Raw Material, Packaging, Service Wholesaler
Distr. Centers
Broker
Collect Raw Milk
Sell Raw Material and Ingredients
SupplierAdd. Purchase of Raw Material / Raw Milk
The Dairy Industry Ecosystem
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 5
YOUR FOCUS
Increase Shareholder ValueIncrease Revenue and Profit Margins
Operational ExcellenceProduct Leadership
Improve Customer Satisfaction
Dairy Companies Often Havethe Right Focus and the Right Strategies…
Protect and enhance revenue
Improve margins
Drive for lower costs
Get closer to the consumer
Improve time-to-market
Enhance operational efficiency
YOUR FOCUS
Increase Shareholder ValueIncrease Revenue and Profit Margins
Cost LeadershipProduct Leadership
Improve Customer Satisfaction
Business STRATEGY
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 6
…But Mostly They Lack the Ability to Execute
Often employees cannot execute the company’s business strategy because the business platform is …
COMPLICATED TO OPERATEComplex and broken process flowsIncomplete or hidden information
DIFFICULT TO CONTROLLack of visibility Lack of traceability
CHALLENGING TO CHANGEMultiple costly integration points Redundant and inconsistent data
Business Enabler
Business STRATEGY
Ability to EXECUTE
A business enabler is required to help the organization refocus
on business strategies!
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 7
Market Forces and Business Needs
Market ForcesRetailer power (Wal-Mart effect)Consumer concerns about food safety; media attentionIncreased legislation and regulations around food safety by FDA and other authorities (e.g., EU Dir. 178/2002, the U.S. Bioterrorism Act of 2002)Changing consumer demands due to demographics and trendsShorter product life cyclesExtreme price pressure and margin erosion Restrictive consumer spending patternMarket consolidation (globalization, M&As) Increasing competitionEmerging private labelsNew technologies reshaping the industry
Resulting Key ChallengesDevelop new products faster and more effectively
Optimize supply chain
Increase efficiency in procurement
Optimize manufacturing
Ensure food safety and regulatory compliance
Improve sales efficiency
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 8
Develop New Products Faster and More Effectively
BenefitsFaster development by creating reusable product specifications
Reduced time-to-market
Ensured competitive advantage
StrategiesEnable collaborative engineering
Consolidate product development data and documents
Reduce development effort and time-to-market
SAP® can help youIntegrate all product-related information
Reduce data redundancy and inconsistency
Integrate into manufacturing process
ChallengesAdapt to ever-changing consumer tastes and requirements
Develop product efficiently
Address increased demands for new products
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 9
Optimize Supply Chain
BenefitsImproved operations excellence
Lower capital commitment
Reduced operating costs
Higher customer satisfaction
StrategiesReduce costs
Streamline supply chain processes
Improve supply chain control
Gain more supply chain visibility
SAP® can help youOptimize distribution processes
Optimize end-to-end planning
Improve asset utilization
Fully integrate logistics management, including transportation and warehouse and inventory management
Shorten order-to-delivery cycles
ChallengesDecrease process costs
Create operational efficiencies and supply chain transparency
Manage shelf-life-based picking and distribution
Ensure accurate and timely shipments
Avoid out-of-stocks
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 10
Increase Efficiency in Procurement
BenefitsIncreased demand planning accuracy
Consistent internal and external procurement reporting
Integrated processes
StrategiesReduce costs
Streamline processes
Gain more visibility and transparency
Improve relationship with producers
SAP® can help youSet up integrated and flexible processes for procurement
Streamline raw milk collection and reception
Ensure integrated quality management
Track batches
ChallengesCope with ever-changing quantity and quality of the raw milk
Manage complex payment conditions
Cope with seasonal fluctuation
Create operational efficiencies and transparency
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 11
Optimize Manufacturing
BenefitsImproved asset utilization
Increased profitability of produced product mix
Consistent cross-stages monitoring
Integrated processes
StrategiesMaximize raw material utilization
Increase demand planning accuracy
Streamline processes
Gain more visibility and transparency
SAP® can help youSet up integrated and flexible processes for manufacturing
Monitor raw material utilization and losses
Ensure integrated quality management
Track batches
ChallengesBase plans on a non-standardized raw material
Define optimal product mix
Create operational efficiencies and transparency
Optimize production
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 12
Ensure Food Safety and Regulatory Compliance
BenefitsReduced penalty risk
Decreased risk of food-safety compensation payments
Reduced risk of bad reputation
Lower operating costs
StrategiesSupport mid- and long-term company success by ensuring regulatory compliance
Set efficient processes in place to enable traceability
Allow targeted product recalls to minimize costs
SAP® can help youTrack, monitor, and trace batches and inventory
Streamline procurement, production, and sales
Manage sales returns
Enable targeted product recalls
ChallengesAlign with governmental regulations (EU 178/2002, the U.S. Bioterrorism Act of 2002, import/export)
Enable fast, effective product recalls
Track and trace from “cow to consumer”
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 13
Improve Sales Efficiency
BenefitsHigher sales volume
Better account retention
Closer customer relationship
Optimal sales force operation
Higher customer satisfaction
StrategiesObtain first-hand information about the market
Optimize process settlement in sales
Increase customer service offerings
Increase customer satisfaction
SAP® can help youPlan, track, control, and optimize sales performance
Expand service processes
Strengthen collaboration with partners and key customers
Track indirect sales and customers
Ensure correct handling of rebates
ChallengesProtect market share
Meet increased service level expectations of customer
Get visibility in the sales process
Manage quality-based price determination for raw material sales
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 14
1. Challenges, Strategies, and Benefits
5. Summary4. Value and Proof Points
2. The Solution 3. SAP™ ERP packaged solution for the dairy industry
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 15
Bus
ines
s O
bjec
tive
s Define business strategy and goals
Understand company performance and profitability
Realize savings in aggregate purchasing
Improve purchasing efficiency
Ensure tracking and traceability
Improve manufacturing efficiency
Ensure quality management in manufacturing process
Establish closer contact with customer
Enhance control over delivery process
Improve marketing effectiveness
Increase sales effectiveness
Description… Focuses on key business processes that create a baseline for future growth
… Delivers immediate benefits by solving the need for system heterogeneity
… Enables significant business process automation
SAP™ ERP packaged solution for the dairy industry
Complete logistical and financial integration
Analyze, Plan, and Develop
Procure Manufacture Marketand Sell
Deliverand Service
Key Performance IndicatorsPurchased Raw Materials Volume – Value
Warehousing/Distribution Costs
Route Settlement Time
Gross Profit/Total Net Sales
Sales Volume Growth
Inventory Turns
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 16
Suppliers & Partners
Customers (e.g. Retailers) &
Channel Partners
Analyze, Plan & Develop Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Milk Procurement from Producer
Additional Raw Material Procurement Procure to Stock
Internal Procurement
Product Development
Recipe Management
Sell & Deliver Sales Order Processing
Raw Material Sales Returns
Operational End-to-End Scenarios Traceability & Food Safety
Inventory Management Quality Management
Enterprise Management & Support Financials
Financial Accounting Cash Management Asset Management
Controlling Standard Cost & Profit Center
Accounting Product Cost Planning CO-PA for Consumer Products Cost Object Controlling
SAP™ ERP packaged solution for the dairy industry
ManufacturingDairy Production
Planning Dairy Process Control
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 17
Suppliers & Partners
Customers (e.g. Retailers) &
Channel Partners
Analyze, Plan & Develop Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Internal Procurement
Sell & Deliver Sales Order Processing
Returns
Operational End-to-End Scenarios Traceability & Food Safety
Inventory Management Quality Management
Enterprise Management & Support Financials
Financial Accounting Cash Management Asset Management
Controlling Standard Cost & Profit Center
Accounting Product Cost Planning CO-PA for Consumer Products Cost Object Controlling
Generic Food Scenarios
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 18
Supports price comparison of vendors’ offers Provides tools to gain greater spend visibility in procurementHelps to manage quotations, contracts, batch handling and quality
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Procure to Stock
Industry Pain PointsImproving purchasing activities efficiencyRealizing savings in purchased valueAllowing visibility on vendors’ conditions and servicesEnsuring tracking and traceability
Business BenefitsAutomate operational tasks Improve vendors’ selection and prices comparison through quotation handling Formalize agreements by contract managementGuarantee quality check through goods receipt inspections
SolutionProcurement of Stock materials
Procurement –Contracts
Request for quotationPrices ComparisonPurchase requisitionPurchase order processingGoods receiptInspect goodsBatch number assignmentStock updateInvoice verification
Create contract: Quantity contracts; Value contracts; Delivery scheduleCreate purchaserequisitionAssign vendor tocontract
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 19
Internal Procurement
Industry Pain PointsImproving internal purchasing activitiesEnsuring tracking and traceability
Encompasses cross-plant internal procurement of products including creation of all required documents for both with or without deliveryProvide functions to monitor stock in transit
Business BenefitsAutomate operational tasksIncreased visibility of stock and stock transfers
SolutionStock transferwith delivery
Stock transferwithout delivery
Create stock transport orderProcess deliveryPost goods issue
Create stock transport orderPost goods issue
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 20
Manage the entire customer order process — variable pricing, delivery, invoicing, and payment. Includes Electronic Data Interchange (EDI), handling of consignment sales, and foreign trade
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Sales Order Processing
Industry Pain PointsManaging variable pricing conditions Long order cycle timesMeeting customers’ requests for improved services Managing sales returns cost effectively
Business BenefitsImprove sales execution timeline Improve order fulfillment rate Provide the customer with alternative services and methods for invoicing and payments
Solution
Sales Distribution
Process sales orderBilling Payment
Picking & distribution based on shelf life expiration dateFreight settlementHandling unit mgt.
Inbound/Outbound EDI Processing
Inbound sales order via EDIOutbound billing document via EDI
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 21
Focuses on the processing of credit memos if no goods are sent back.Includes quality evaluation for returned goods and appropriate stock movement.
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Returns
Industry Pain PointsEfficient handling & document complaints.Managing sales returns cost efficiently.
Business BenefitsEnable corporate compliance strategyEffective batch-specific returns processing
Solution
Returns and Complains
Returns Processing
Process credit memosQuality evaluationGoods movementto blocked orunrestricted stock.
Ship palletsReturn pallets
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 22
Capability to track and trace products at all stages of production, processing, and distributionAllow fast and efficient recall of a defective product batch
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Traceability & Food Safety
Industry Pain PointsComplying with food regulations
HACCP (Hazard Analysis & Critical Control Points)EU (Article 18 of Regulation 178)US (the US Bio-terrorism Act 2002)
Addressing growing food-safety concerns from consumers
Business BenefitsProfessionally managing a possible product recallMinimize risk of non-compliance with food & beverage regulationsEffective batch-specific returns processing
SolutionQuality
ManagementBatch
Management
Quality planningQuality inspectionRecording of laboratory analysisQuality reportingQuality improvement
Batch creation and determinationBatch-where-uselists
Recall batches and create follow-up activitiesManage batch-specific return processingManage batches based on shelf life expiration
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 23
Consists of the whole procurement and delivery cycle with warehouse for the storage management, including quality inspectionReturn rejected goods to the vendor
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Inventory Management
Industry Pain PointsMaintaining low inventory levelsAvoiding out-of-stock situations at retailersEstablishing visibility to inventory levels throughout the entire supply chain
Business BenefitsReduce working capital by keeping inventory levels lowIncrease sales by reducing out-of-stock situationsImprove consumer retention due to product availability
SolutionInventory
Management
Integration with supply chain accountingGoods receiptGoods issuesManaging different stock categoriesInventory valuation
Transportation Management
Plan transportsMonitor executionCalculate costsManage transportationsettlement
Warehouse Management
Storage ManagementQuality ManagementQuality InspectionReturn of goods
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 24
Helps to get an insight into all aspects related to accounting and controllingProvides streamlined functionalities that allows visibility,increases productivity and regain control of their business processes
Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Procure to Stock
Third Party
Sourcing & Procurement Procure to Stock
Third Party
Plan & Manufacture
Production Planning Production
Plan & Manufacture
Production Planning Production
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Sell & Deliver Sales Order Processing
Direct Store Delivery (DSD) Rebate & Bonus Management
Commissions Indirect Sales
Returns Empties Processing
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Operational End-to-End Scenarios Inventory Management Quality Management
Traceability & Food Safety Cross Company Transactions
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Enterprise Management & Support Financials & Controlling
Excise Duty (Beverage) G65
Financials & Controlling
Industry Pain PointsMeeting local legal and fiscal requirementsImproving administrative activities efficiencyMaintaining focus on most profitable customers and brands
Business BenefitsImplement an ERP solution fully compliant and continuously updated with local legal and fiscal requirementsImprove efficiency in accounting activities due to a seamless process integrationEnhance company profitability analysis through profit and loss calculation
Solution
Financials Controlling
General Ledger accountingAccounts payable accountingAccounts receivable accountingBank accountingClosing activitiesCash managementAssets management
Standard cost and profit center accountingProfitability analysisProduct costs planningProduct cost controlling
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 25
Suppliers & Partners Customers (e.g. Retailers) & Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Our specific Solution Offering for the Dairy Industry
Sell & Deliver Sales Order Processing
Returns
Operational End-to-End Scenarios Traceability & Food Safety
Inventory Management Quality Management
Food
Sourcing & Procurement Procure to Stock
Internal Procurement
Enterprise Management & Support Financials
Financial Accounting Cash Management Asset Management
Controlling Standard Cost & Profit Center
Accounting Product Cost Planning CO-PA for Consumer Products Cost Object Controlling
Manufacturing
Milk Procurement from Producer Additional Raw Material Procurement
Product Development
Recipe Management
Dairy Production Planning & Process
Control
Raw Material Sales
Dairy
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 26
Managing the fast and efficient product development by structured re-usable product specificationsSeamless integration into the production planning and execution process
Product Development with Recipe Management
Industry Pain PointsSlow and inefficient product developmentChanging consumer tastes and requirementsIncreasing demand for new products
Business BenefitReduce development cycle time & costsEnsure company-wide consistent product informationReduce time-to-market to gain competitive advantage
SolutionProduct Data Management
Product Lifecycle Management
Suppliers & Partners Customers (e.g. Retailers) & Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Milk Procurement from Producer
Additional Raw Material Procurement Procure to Stock
Product Development
Recipe Management Manufacturi
ng Dairy Production Planning
Dairy Proce ss Control
Sell & Deliver Sales Order Processing
Raw Material Sales Indirect Sales
Di rect Store Delivery (DSD)
Operational End-to-End Scena rios Traceability & Food Safety
Inventory Management Quality Management
Cro ss Company Transactions
Enterprise Management & Support Financials
Controlling
Maintain product specificationsLabel ManagementMultilevel recipe mgt.Define Batch Management
Document ManagementChange ManagementIntegrate Recipe into production processCreate master recipeCreate process order
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 27
Encompasses the efficient procurement and collection of raw milkEnsure compliance with high quality standards and traceability requirementsCalculate payments based on quantity and quality characteristicsMonitor procurement and payment process
Milk Procurement from the Producer
Industry Pain PointsManaging the complex payment conditionsCoping with seasonal fluctuation and changing demandsComplying with the high quality standards and traceability requirements
Business BenefitsEnable accurate payment both for producer and transport service providerProvide payment reporting to the producerStreamline raw milk collection & reception process
Solution
Milk Collection Milk Reception Milk Analysis
Milk Payment Reporting & Analysis
Suppliers & Partners Customers (e.g. Retailers) & Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Milk Procurement from Producer
Additional Raw Material Procurement Procure to Stock
Product Development
Recipe Management Manufacturi
ng Dairy Production Planning
Dairy Proce ss Control
Sell & Deliver Sales Order Processing
Raw Material Sales Indirect Sales
Di rect Store Delivery (DSD)
Operational End-to-End Scena rios Traceability & Food Safety
Inventory Management Quality Management
Cro ss Company Transactions
Enterprise Management & Support Financials
Controlling
Maintain standard routesProvide route list to truck driver
Dairy reception cockpitProcess purchase OrderAutomatic creation of inspection lot and batch numberBatch management
Gather results of inspection lots from producer samplesGather results of inspection lots from tank truck samplesCreate usage decision for inspection lots
Calculate payment for producerCalculate payment for transport service providerSettle paymentMaintain payment calculation scheme
Monitor raw milk quantity & quality characteristicsPayment reporting
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 28
Supports the additional purchase of raw materials from other companies on the determined shortage in the demand planning processCalculate vendor payment based on the raw material quantity and quality characteristics.
Additional Raw Material Procurement
Industry Pain PointsDetermining demand for additional required raw material due to ever-changing quantity and quality of collected raw milkManaging the vendor payment based on raw material quality characteristics
Business BenefitsIncrease demand planning accuracyHandle the quality-based payment for the vendor
SolutionRaw Material
Demand Planning
Raw Material Reception
Raw Material Analysis
Raw Material Payment
Reporting & Analysis
Suppliers & Partners Customers (e.g. Retailers) & Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Milk Procurement from Producer
Additional Raw Material Procurement Procure to Stock
Product Development
Recipe Management Manufacturi
ng Dairy Production Planning
Dairy Proce ss Control
Sell & Deliver Sales Order Processing
Raw Material Sales Indirect Sales
Di rect Store Delivery (DSD)
Operational End-to-End Scena rios Traceability & Food Safety
Inventory Management Quality Management
Cro ss Company Transactions
Enterprise Management & Support Financials
Controlling
Determine required additional raw materialsCreate purchase order
Post goods receiptAutomatic creation of inspection lot and batch numberBatch management
Gather results of inspection lotsCreate usage decision for inspection lots
Calculate vendor payment for additional purchased raw materialSettle paymentMaintain payment calculation scheme
Monitor raw material quantity & quality characteristicsPayment reporting
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 29
Manage the multilevel manufacturing processes including seamlessbatch and quality managementIncorporates the ever-changing quantity and quality of the raw materialProvide powerful tools to gain a cross-stages raw material controlling
Dairy Production Planning & Process Control
Industry Pain PointsProduction Planning based on a non-standardized raw material High cost of the raw material comparing to the total production costsDefining optimal product mix in order to maximize utilization & profitablity
Business BenefitsOptimize and streamline production processIncrease profitability by improved visibility to raw material utilization and lossesComply with the high quality standards and traceability requirements
SolutionProduction Planning Process Control Quality
Management
Controlling & Analysis
Suppliers & Partners Customers (e.g. Retailers) & Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Milk Procurement from Producer
Additional Raw Material Procurement Procure to Stock
Product Development
Recipe Management Manufacturi
ng Dairy Production Planning
Dairy Proce ss Control
Sell & Deliver Sales Order Processing
Raw Material Sales Indirect Sales
Di rect Store Delivery (DSD)
Operational End-to-End Scena rios Traceability & Food Safety
Inventory Management Quality Management
Cro ss Company Transactions
Enterprise Management & Support Financials
Controlling
Demand planning based on historical data Production planning synchronous to salesMaterial resource planning (without shelf-life)Simulate planningGraphical capacity planning
Maintain product master data & recipes for multilevel productionBatch management across all stagesSeparate raw milk into componentsMaterial valuationManage shelf-life expiration date for final products
Create inspection lots for semi-finished and finished goods Gather results of inspection lotsCreate usage decision for inspection lots
Cross-stages raw material controllingProduct costingBatch information cockpitProduction information system
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 30
Supports the sales of raw materials between dairies based on the raw material requirements and the available surplusesPricing and distribution are based on the raw material quality characteristics
Raw Material Sales
Industry Pain PointsManaging variable pricing conditions based on quality characteristics
Business BenefitsSimplify price determination by using the integrated batch and quality management systemImprove sales execution timeline
Solution
Production Sales Distribution
Billing
Suppliers & Partners Customers (e.g. Retailers) & Channel
Partners
Analyze, Plan & Develop
Procure Manufacture Market & Sell Deliver & Service
Sourcing & Procurement Milk Procurement from Producer
Additional Raw Material Procurement Procure to Stock
Product Development
Recipe Management Manufacturi
ng Dairy Production Planning
Dairy Proce ss Control
Sell & Deliver Sales Order Processing
Raw Material Sales Indirect Sales
Di rect Store Delivery (DSD)
Operational End-to-End Scena rios Traceability & Food Safety
Inventory Management Quality Management
Cro ss Company Transactions
Enterprise Management & Support Financials
Controlling
Manage process orderCreate inspection lot
Process sales document
Picking based on quality characteristics Create inspection lot for picked raw materialUsage decision and goods issue
Invoice processingPrice determination based on quality characteristics
©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 31
Reduce operating costs and increase efficiency
SAP ERP for the Dairy Industry Provides Increased Shareholder Value for Your Business
ShareholderValue
RevenueGrowth
Improve customer satisfaction
Increase sales
Reduce Cost
Reduce Working Capital
Customer service
Distribution
Inventory
Reduce Risk
Finance
Procurement
Production
SAP Scenarios(SAP ERP for the Dairy Industry)
* For further details, please refer to the SAP ERP for the Dairy Industry Brief.
Comply with food regulations
Improve order fulfillment
Improve sales execution timelineImprove customer understanding
Improve order fill rate
Improve efficiencies in accounting activities
Lower raw materials costs
Calculate and monitor production costs seamlessly
Business OpportunitiesBusiness AreasBusiness Objectives
Utilize full track-and-trace capability
Optimize inventory usage
Financials and Controlling
Sales and Customer Order
Manufacturing
Inventory Management
Food Safety
Indirect Sales
Returns
Procure to Stock
Increase efficiency for sales returns
Milk ProcurementImprove transparency in dairy procurement
Improve yield and reduce waste
Product Cost Controlling
Enable detailed profitability analysis
Realtime access to production cost information
Raw Material Sales
Recipe Management
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1. Challenges, Strategies and Benefits
5. Summary4. Value and Proof Points
2. The Solution 3. SAP™ ERP packaged solution for the dairy industry
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Why SAP™ ERP Packaged Solutions?
I know that SAP® software can be tailored in a very flexible way, but I really want to see proof that SAP understands the dairy business.
I’m not a large dairy company. The classical implementation is not the right thing for me. I need software that works immediately, ideally via a hosting or outsourcing partner.
What can you offer me in this way?
Sure, SAP can support me in my daily business, but I’ve heard it takes a lot of work to implement the software. I need to execute
today!
What does SAP have to offer that will spare me starting
from scratch?
The processes demonstrated here were just right for me.
Can I use them to leverage my global implementation in order
to save time and money?
I am already working with SAP software. How do the SAP
solutions fit together?
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Reviewing the Packaged Solution Approach
SAP™ ERP packaged solution for the dairy industry
FastProvenReliable
Low Risk Fixed Scope
SAPERP
packagedsolution
Fast ROI
+
+
mySAP ERP
SAP® Best Practices
Services
mySAP ERP 2004
SAP Best Practices++
• SAP’s next generation Enterprise Resource Planning solution
• Powered by SAP NetWeaver TM
• Designed for all industries• Fully integrated within the mySAP Business Suite
Services
• Best-in-class industry expertise built into SAP ERP
• Predefined end-to-end processes for the dairy industry
• Industry-specific documentation• Preconfigured System
•Preconfiguration settings•Master Data•Configuration documentation•Test catalogs
++• Deep dairy industry knowledge• Focus on value creation and risk reduction• Delivery excellence
Implementation
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Composition of mySAP™ ERP
The next generation SAP®
enterprise resource planning solution
Powered by SAP NetWeaver
Designed for all industries
Fully integrated within the mySAP Business SuiteInsight to business processes and corporate compliance Adaptable business processes from end to endFlexible deployment of business processesEnhanced user productivity
mySAP ERPAnalyticsFinancials
Human Capital ManagementOperations
Corporate Services
SAP NetWeaver™
Com
posi
te A
pplic
atio
n Fr
amew
ork
Life Cycle M
anagement
PROCESS INTEGRATIONIntegration Broker
BusinessProcess Mgmt
INFORMATION INTEGRATIONBus. Intelligence
Master Data Management
Knowledge Mgmt
PEOPLE INTEGRATIONMulti-channel access
Portal Collaboration
APPLICATION PLATFORMJ2EE
DB and OS Abstraction
ABAP
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Target
Traditional strategy for an implementation project
Implementation using best practices for SAP ERP
packaged solution
Basic Approach of SAP™ ERP Packaged Solutions
We know your concerns, risks, and business needs – and we know how to support them perfectly based on identifying and anticipating reusable business processes and project activities.
Get a living and fully documented prototype within days that you can
rapidly turn into a productive solution.
Conception and implementation of
customer processes
Conception and implementation of
customer processes
Best practicesusing mySAP ERPpackaged solution
Effective evaluationRapid implementationExplicit business expertiseImplementation instrument
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SAP™ ERP Packaged Solution: The Components
Best-in-class industry expertise built into
Predefined end-to-end processesUse of customer languageIndustry-specific documentationDocumented business know-how
Definition and documentation of integrated, supplier specific business processes.
SAP ERP
Development of supplier specific Preconfigured Systems based on defined and documented business processes.
Subset
Suppliers & Partners Customer & Channels Engineering Procurement Manufacturing Sales & Distribution Customer Service
OEM Relationship Management Collaborative Engineering Key Account Management
Time-to-Market New Product Development & Introduction
Life-Cycle Data Management
Supplier Collaboration Strategic Sourcing
Operational Procurement & Inbound Logistics
Make-to-Order/Make-to-Stock Supply to Line
Manufacturing Execution Outbound Logistics
Enterprise Asset Management
Sales Order Management Demand & Order Scheduling
Order Execution & Receipt Settlement
Customer Service Warranty Management Service Parts Planning
Service Parts Fulfillment
Enterprise Management & Support Analytics Financials
Human Capital Management Corporate Services Operations Support
Suppliers & Partners Customer & Channels Engineering Procurement Manufacturing Sales & Distribution Customer Service
OEM Relationship Management Collaborative Engineering Key Account Management
Time-to-Market New Product Development & Introduction
Life-Cycle Data Management
Supplier Collaboration Strategic Sourcing
Operational Procurement & Inbound Logistics
Make-to-Order/Make-to-Stock Supply to Line
Manufacturing Execution Outbound Logistics
Enterprise Asset Management
Sales Order Management Demand & Order Scheduling
Order Execution & Receipt Settlement
Customer Service Warranty Management Service Parts Planning
Service Parts Fulfillment
Enterprise Management & Support Analytics Financials
Human Capital Management Corporate Services Operations Support
Preconfigured System
PreconfigurationsettingsMaster dataConfigurationdocumentationTest catalogsWorkshopcontent
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Key ERP Processes for CP – Service Offering
End-user training
Automated data migration
Custom forms, reports, and interfaces
Custom authorizations
Hosting
Financing
Change management
Post-implementation support
Off-shore components (e.g., data migration, custom reports)
Data archiving
Operational concept
Project management
Delta requirements workshops
Implementation of defined scope
Technical installation of system
Key-user training on the job
End-user documentation
Predefined sheets for data migration
Predefined test catalogs
Predefined forms and printouts
Go-live support
OptionsIn basic scope*
Consulting Deliverables
* Deliverables in English
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Benefits
Clearly defined scope and time framePreconfigured end-to-end business scenariosPredefined implementation
⇒ Reduces implementation time and costs
Fast
ReliableProven
SAP®
ERPPackagedSolution
SAP® Best Practices deliver proven business expertise to enhance competitivenessImplementation methodology and acceleratorsMore than 15,000 midmarket organizations have chosen SAP to enhance performance and efficiency
⇒ Optimizes business processes and ensures ROI
World-class enterprise resource planning solutionState-of-the-art technology and scalabilityOver 30 years’ industry experience, financial viability, and strong R&D
⇒ A safe investment
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What the Statistics Say
More than 60% of all mySAP™ ERP implementations are accomplishedin less than nine months.
< 9 months> 9 months
Implementation
Recent implementations of SAP® solutions at midsize companies have averaged only 13 weeks.
010-11weeks
12-13 weeks
14-16 weeks
10
20
3025%
40%35%
40
Average implementations for midsize companies are measured in weeks.
SAP is already successful in the food midmarket.
Food customers by no. of employeesRange of Employees
X-Large
Large
Local
Small
Total
> 25,000
5,000-25,000
1,000-4,999
< 1,000
469
592
338
1.399
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1. Challenges, Strategies, and Benefits
5. Summary4. Value and Proof Points
2. The Solution 3. SAP™ ERP packaged solution for the dairy industry
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SAP®: The Smart Choice for Your Global Business
12 million users. 69,700 installations. 1,500 partners. 28,900 people in more than 50 countries. 27 industry solutions. $7 billion in revenue and more than $1 billion annually in R&D.
SAP is the recognized leader in providing collaborative business solutions for all types of industries and for every major market.
SAP is the world’s largest interenterprise software company and the world’s third-largest independent software supplier overall.
SAP will continue to provide you with solutions for all future trends to protect your investment.
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Fast, Predictable Payback
Implement what you need, when you need
it, with SAP. Time
Cash Flow
AccelerateTime-to-Benefit
Shorter Payback
Time
Reduce Initial Investments
Supports future growthDelivers business value through theservice providers that best fit customer needs:
Customers can choose familiarindustry partnersCustomers can choose SAPif needs dictate
Addresses key business issues from an industry-specific perspectiveLimits business disruption through predefined services focused on industry best practicesProvides real ROI within budget and timeline Enables customers to buy only the modular functionality they needLeverages and extends existing investments;customer decides what to add or replace
SAP’s phased implementation approach provides the following benefits:
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SAP® R&D Investment
R&D Investment (€ Millions)
“Importantly, the stronger margin does not appear to be coming at the expense of future growth – R&D head count is up Q/Q and Y/Y, and S&M head count is down marginally quarter-on-quarter and up year-on-year – both indicating that capacity and product investment are not being curtailed.”
Solomon Smith Barney
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SAP® – The Right Short-, Mid-, and Long-Term Choice
Q2 2000-Q1 2001
Q3 2000-Q2 2001
Q4 2000-Q3 2001
Q1 2001-Q4 2001
Q2 2001-Q1 2002
Q3 2001-Q2 2002
Q4 2001-Q3 2002
Q1 2002-Q4 2002
Q2 2002-Q1 2003
Q3 2002-Q2 2003
SAP AGSiebel*Oracle **PSFT&JDEC*I2*
Q4 2002-Q3 2003
Total License Revenue: Relative Market Shares(Rolling four quarters, based on license revenues)
* Forecast by financial analysts (I2, PSFT&JDEC, SEBL)** Fiscal year is not calendar year; comparison based on most recent quarter (e.g., SAP Q1 vs. Oracle Q3)
Source: CMI analysis based on company data and financial analysts estimates as of January 20, 2004
59%
16% 15% 15% 14% 13%
2%
58%56%54%
51%48%
46%44%43%
41%40%40%
11%12%12%13%
16%
18%18%20%20%21%22%21%
14%15%
14%15%
19% 17% 18% 17%
16% 16% 16% 16%
17%18% 14%15%
17%17%17%
2%2%2%2%2%3%3%4%4%5%4%
0%
10%
20%
30%
40%
50%
60%
Q1 2003-Q4 2003E
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The SAP solution for the dairy industry is based on 20 years of industry experience.
The SAP solution for the dairy industry is proven by over 100 dairy customers worldwide.
SAP is working with the best in the food industry. 6 of the top 10 dairy companies are SAP customers.
SAP® in the Dairy Industry
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What the Customer Community Is Saying
When you produce food, there is a holding time before you get the lab results that authorize release of goods. This is very easy to track in the SAP® solution – everything is stored by a batch date, so we can quickly access how much product we have on board, where it is, the date we produced it, and when it is ready for release.
Instead of having data with significant delays, as it happened before, we can now have them at our disposal with the desired speed and quality.
Morgan Foods looked at many software packages, and as we continued looking and continued learning, we were very amazed at SAP’s breadth of technology and capabilities to control.
“Ryan Peralto, General Manager
“Robert Schlingensiepen, Managing Director
“Dan Slattery, Vice President and Chief Financial Officer, Morgan Foods
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SAP® Customer Examples in the Dairy Industry
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Deloitte Is Your Partner for Success
37,000 business consultants. 5,000+ dedicated SAP practitioners in +35 countries, 1,600+ clients, more than 50% of our SAP consultants have 10+ years of experience, 1,200+ live installations worldwide
Deloitte is the recognized leader in providing quality SAP implementation services for all industries.
Deloitte is dedicated to the development of true partnershipswith food and beverage companies – we work with our customers not just for our customers.
Deloitte will measure its success by the value created for food and beverage companies – our approach is value-driven and focused on creating immediate results for the organizations we work with.
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The Overall Objective for the Deloitte/SAP Alliance Is to Create More Value for Your Dairy Company
+The world’s leading provider of business solutions
Solution Package
World-class integrated solutionsPreconfigured processesFood-specific prepackaged solutionsFast installation
The market’s leading business advisors and system integrators
Service Package
Deep industry knowledgeCXO relationships Delivery excellenceDefined scopePredefined effortGlobal project experiences
Effective response to changing market conditions
Customer Value
Maximizing operational effectiveness Shorter implementation projectsMinimizing riskLower TCODecreasing project costsHigher shareholder value
= ☺
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Extensive Experience with SAP® Implementations
Implement SAP packaged solutions in time, within budget, and with full
benefit realization!
Successfully implementing SAP solutions – and extracting full value from an implementation – isn’t just about technology. It’s about focusing in on business value drivers.Deloitte has a reputation for delivering successful, business-drivenimplementations with low risk.Deloitte provides a robust set of tools, solutions, and methodologies to complement SAP’s business solutions .
As a leading SAP partner, Deloitte offers a complete range of implementation services:
Business case developmentSystem designConfigurationTestingDeployment
Complementary services in tax, finance, HR, assurance, and riskVast experience in delivery of solutions and services to the middle market
Working with Deloitte is the first step toward a successful SAP implementation for your organization:
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SAP® Consulting: Your Partner for Success
More than 10,000 consultants around the world,32 years of SAP implementation experience
SAP Consulting delivers value to your business based on measurable results …
SAP Consulting is well-known for its excellent competence and experience in implementing SAP solutions within the core areas of the food and beverage industry (“SAP knows SAP best”).
Decades of SAP Consultants’ project experience have been merged into the SAP ERP packaged solution for the beverage and food industry.
Pragmatic project approach tailored to the needs of the midmarket:Short project durations due to experienced consultantsCustomer enablement instead of dependency from consultantsEfficient remote consulting modelSAP’s offering also includes financial and/or hosting services
SAP Consulting
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SAP® Solutions and SAP ConsultingCreate More Value for Your Dairy Company
+The world’s leading provider of business solutions
Solution Package
World-class integrated solutionsPreconfigured processesBeverage-specific prepackaged solutionsFast installation
The industry’s leading provider of SAP implementations
Service Package
Deep industry and solution experienceImplementation approach tailored to needs of the midmarket SAP solution out of “one hand” (end-to-end solution provider)Highest quality and commitment due to our product responsibility
Effective response to changing market conditions
Customer Value
Maximizing operational effectiveness Shorter implementation projectsMinimizing riskLower TCODecreasing project costsHigher shareholder value
=SAP Consulting ☺
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Customer Value Proposition of SAP® Consulting
First-hand knowledge of SAPbusiness and technology innovationsBest practice methodologies and project management to leverage the value of software investmentsGlobal presence and 30 years’experience with 69,000 installations in 27 industries
Expertise and capability to create and realize
business value
Commitment to reduce customer risk
Every SAP Consulting customermust be a reference for short time to value, low TCO, and realization of business benefits Constant engagementthroughout entire customer life cycleSAP has never let a customer down in 30 yearsCommitted to support customer’s push for self-sufficiency
Capability to leverage entire SAP ecosystem
Direct access to developmentLeverage SAP Customer Services Network knowledge and resourcesSupport and commitment to our partner ecosystem
SAP ConsultingIs a valued business partner to SAP’s customers,
ensuring the fast and enduring success of their SAP investment.
Unparalleled Motivation
Skills andCompetencies
LeveragePotential++
= Customer Success
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1. Challenges, Strategies and Benefits
5. Summary4. Value and Proof Points
2. The Solution 3. SAP™ ERP packaged solution for the dairy industry
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Our Initiative for the Dairy Industry
Accelerated Time to ValueFlexible componentsRapid success: Implementation in less than 6 months
Industry Best PracticeMore than 20 years in business, with over 400 beverage customersNumber one enterprise software vendor in the world with more than $1B annual R&D
Preconfigured SAP SolutionsA combination of SAP’s core solution and our preconfigured market industry solution
Financing OptionsNo upfront investmentA 5- to 7-year financing deal
A full solution with low total cost of ownership, scalable to your needs! Low-cost implementations with deep industry skills, best practices, and preconfigured SAP components!
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In Summary
SAP is flexible to grow with your businessAllows for increasing market share
Is scalable to your needs
Gives you operational visibility
Helps shorten time to market
Helps improve customer loyalty
SAP is quick to implement, with fast, predictable payback
Fixed-price, 16-week average implementation time
Phased approach and best practices
SAP is the smart choice for your investmentOver 20 years in business, with over 400 beverage customers
Number one enterprise software vendor in the world, with over $1B annual R&D