SAP Industry OverviewSAP for Wholesale Distribution

SAP FOR WHOLESALE DISTRIBUTIONDRIVE SUPERIOR PERFORMANCE AND PROFITABLE GROWTH

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You don’t run a generic business. So why use generic solutions?

SAP provides solutions tailored specifically to the wholesale distribution industry. Our goal is help distributors provide value to customers and vendors, differenti-ate their business from competitors, and grow profitably and sustainably.

The SAP for Wholesale Distribution solutions are designed to meet the unique challenges of wholesale distributors. These solutions help you achieve superior business performance while effectively managing your entire enterprise – people, physical assets, business processes, and technology. They allow collaboration inside and outside the enterprise and help you adopt industry best practices that SAP has uncovered over more than 37 years of working with more than 5,700 wholesale distributors globally.

“Business transformation is imperative in the wholesale distribution industry today. Distributors can successfully reinvent themselves by leveraging technology to optimize their business processes, collaborate closely with their partners, and broaden their reach beyond the traditional boundaries.”

Albert Pang, Research Director of Enterprise Applications, IDC

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“We have the same business issues as a large enterprise, but more resource constraints. . . . We soon realized an SAP solution could be a good fit for us.”

Bob Carroll, Senior Vice President and CFO, Powell Electronics Inc.

Today, the wholesale distribution indus-try faces some of the greatest forces of change in its history. Industry lead-ers must find ways to respond to pow-erful business trends, including:• Industry consolidation, globalization,

and mergers and acquisitions• Customer demand for new types of

value-added services, more proactive collaboration, and higher visibility into distributor operations

• Proliferation of vendor cost recovery alternatives and the need to rapidly access information

These trends have made distributors realize they must transform their busi-ness in several different ways, by:• Becoming a real-time enterprise and

gaining agility via automation and optimization of business processes

• Innovating and adopting new profit models, new business practices, and new ways of adding value to their trading partners’ success

• Building deeper relationships with trading partners by getting plugged into their business networks

• Differentiating their business from the competition

In response to these business trends and challenges, forward-looking distrib-utors are evolving from just inventory managers to information managers. They are leveraging enabling technology and the SAP for Wholesale Distribution solution portfolio to:• Trim costs, gain efficiencies, and

drive higher employee and asset productivity

• Make better decisions based on real-time information, strategic insight, and enterprise-wide visibility

• Break down the silos that exist within the enterprise as well as extend them-selves beyond their company’s four walls to collaborate with trading part-ners and drive business value for all

• Drive profitable growth and increase shareholder value

Most C-level executives believe such transformation should be continual – not one time but over time – thereby requiring a new degree of flexibility and adaptability for all parts of the enterprise.

SAP for Wholesale Distribution is a comprehensive, integrated set of solu-tions that gives companies of all sizes the industry-specific tools and function-ality they need to improve operations and profitability, enable innovative busi-ness models, and provide customers with a range of value-added services. The solutions are available in a variety of languages and support multiple cur-rencies, to fit the needs of your interna-tional or global business.

In addition, SAP partners have devel-oped qualified SAP® Business All-in-One partner solutions that are based on SAP-supported best practices for wholesale distribution. These partner-developed solutions offer a rapid imple-mentation approach based on a pre-defined scope at a specified price and in a predefined time frame.

With more than 5,700 wholesale distri-bution customers and over 37 years of proven performance and results, SAP has earned the position of a trusted advi-sor and valued partner in your industry.

COMPETITION, CUSTOMERS, AND CHANGEGAIN COMPETITIVE ADVANTAGE IN A COMPLEX BUSINESS ENVIRONMENT

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SAP for Wholesale Distribution sup-ports a full range of industry processes – from purchase order and inventory management to supplier-managed inventory, comprehensive returns man-agement, and chargebacks. The set of solutions integrates sales, logistics, and financial management functionality to support innovation and new services that meet the needs of your customers – and your business. And it provides sophisticated tools that let you more easily analyze operations and profit -a bility to drive responsiveness and improvement – internally and across your supply chain network.

SAP for Wholesale Distribution helps companies achieve a range of business benefits, such as improved service levels, reduced capital investment in stock across the supply chain, lowered cost of goods sold, streamlined opera-tions, and decreased overhead costs – among many others.

Overall, companies can gain the follow-ing benefits from SAP for Wholesale Distribution:• Optimized planning and logistics

processes. Distributors can bundle orders for optimized, cost-effective delivery. Inventory optimization helps you achieve the best purchase price from suppliers, which significantly reduces cost of goods sold.

• Improved profitability. SAP for Wholesale Distribution enables you to offer value-added marketing, sales, and financial services. You can use SAP solutions to enable innovative services that provide order and logis-tics information, new product man-agement, kitting, configuration, repairs, or financing.

• Enhanced cost recovery. You can handle the rebate and chargeback processes for reimbursements based on special agreements between manufacturers and customers. The software handles data capture, sub-sequent invoicing, and control of agreements. In addition, functionality for managing and tracking commis-sions helps you forge optimal financial performance.

• Reduced financial and transactional costs. You can automate inefficient manual accounting practices and improve difficult credit and dispute management processes. The inte-grated business transaction and financial solution improves timeliness and accuracy of financial and man-agement accounting practices.

• Improved decision making. By allo-cating costs based on information in the vendor billing document, the software makes costs more visible and allows you to more accurately evaluate profitability. Sophisticated business intelligence tools provide deeper insight into business process-es, helping you make sound business decisions.

• Ability to grow profitably. SAP for Wholesale Distribution solutions will fit your business needs whether you are a small business, a midsize com-pany, or a large, multinational enter-prise. And when you’re ready to grow, the solutions scale with you and support you. They ease the inte-gration processes that are necessary when growth comes through mergers and acquisitions, helping you smoothly incorporate new systems into your business.

OPTIMIZE BUSINESS PROCESSES – INCREASE PROFITABILITYREALIZING A WIDE RANGE OF BUSINESS BENEFITS

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• Supply chain execution includes inbound and outbound logistics, warehouse and inventory manage-ment, compliance, and foreign-trade management, enabling customs handling, compliance with regula-tions, and accommodating various trading practices.

• Order-to-cash and chargeback management helps you manage and maintain customer relationships, process orders using a variety of marketing channels, collaborate with customers to manage inventory, manage billing and collection activi-ties, and enable chargeback claims processing.

• Financials and analytics deliver a complete, integrated financial rebate and chargeback management solu-tion to help ensure compliant and accurate accounting and financial reporting.

SAP for Wholesale Distribution Supports Key Business Activities

The SAP for Wholesale Distribution solution portfolio supports the follow-ing business processes:• Demand and supply planning,

including collaborative forecasting and inventory optimization, helps you improve service levels and reduce capital investments. You can use forecasts from planning to streamline transportation planning with optimized carrier selection.

• Procure-to-pay and rebate management helps you manage strategic as well as operational relationships with suppliers, includ-ing strategic sourcing, purchasing, supplier collaboration, supplier agreement monitoring, and cost recovery.

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Suppliers Planning Procurement Logistics Sales Customers

SAP for Wholesale Distribution sup-ports your most important business processes and provides tools to help you understand how these processes work. One of these tools is the SAP solution map.

SAP solution maps are multilevel blue-prints of processes constructed from customer and industry analysts input, plus the technical expertise SAP has acquired through extensive business experience and research. By showing what processes SAP and SAP partner solutions support, the solution maps

help you visualize, plan, and implement a coherent, integrated, and comprehen-sive information technology solution that covers all your critical business processes. You can review the solution map for SAP for Wholesale Distribution online at www.sap.com/businessmaps.

THE SAP FOR WHOLESALE DISTRIBUTION SOLUTION MAP UNDERSTANDING BUSINESS VALUE

Enterprise Management & SupportMaster Data Management Analytics FinancialsHuman Capital ManagementCorporate ServicesOperations Support

SAP for Wholesale Distribution Solution Map

PlanningDemand and Supply Planning Profitability Analytics

Procure to PaySupplier Management Supplier Rebate ManagementPurchase OptimizationPurchasingSupplier Returns Management

Supply Chain ExecutionInventory Management Warehouse and Distribution Center ManagementTransportation ManagementSupply Chain Visibility and ControlForeign Trade Management

Value-Added ServicesSupplier Services Customer ServicesCollaborative Services

Order to CashCustomer ManagementMultichannel Sales Order ProcessingBroker TradingCustomer Returns ManagementChargeback ManagementBilling and Collections Management

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INTEGRATE TODAY – BE PREPARED FOR TOMORROWWITH A SOLUTION DESIGNED FOR TODAY’S WHOLESALE DISTRIBUTORS

Because SAP for Wholesale Distribution gives you an integrated, comprehen-sive set of industry-specific solutions, it minimizes the need for customization typically found with fragmented solu-tions. It lets you keep up with an evolv-ing industry by giving you the flexibility to add functions and support capabili-ties as your business needs them. For example, you can implement portions of SAP for Wholesale Distribution to meet today’s most pressing business requirements, and then quickly add applications for Internet sales, customer interaction centers, or strategic sourc-ing. And to help ensure that you have the full range of tools you need, SAP works closely with more than 40 part-ners to provide integrated solutions and services designed specifically for the wholesale distribution industry.

SAP for Wholesale Distribution is built on the SAP NetWeaver® technology platform, which provides a solid foun-dation for cross-functional business processes. SAP NetWeaver lets you integrate users, information, and busi-ness processes; link SAP and non-SAP software systems; and collaborate with partners and customers – quickly and cost-effectively. The SAP NetWeaver technology platform also provides the scalability and flexibility to support new business models and strategies and implement innovative processes based on technologies such as radio frequen-cy identification, master-data manage-ment, and comprehensive business intelligence.

Get Started

You’re in business to win; we’re here to help.

SAP and our global ecosystem of part-ners are helping companies transform their business by providing a compre-hensive, integrated solution specifically built for the wholesale distribution in-dustry. Our solutions are helping dis-tributors achieve superior performance across their enterprise, in functions such as finance, business analytics, sales, services, order management, warehouse and logistics planning, and procurement. And with our partner eco-system we are able to meet your spe-cific needs with minimal cost and risk.

We urge you to invest the time to see how SAP is helping distributors – small businesses to midsize companies to large enterprises alike. Over 5,700 dis-tributors across the globe have chosen SAP solutions. But SAP’s most impor-tant success story is yet to be told. It’s the one in which your organization be-comes more adaptive, productive, and profitable with the help of our solution. The story begins when you invite us to discuss your business requirements, or when you visit us at www.sap.com/wholesale. We look forward to sharing our experience with you.

“SAP provided us one plat-form with all of the func-tionality that we required right out of the box.”Chris Meiser, Executive Vice President of Operations, Tallard Technologies Inc.

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BENEFITS SUPPORTED BY SAP FOR WHOLESALE DISTRIBUTION

Business Function Benefi t

Demand and supply planning • Improve service levels while reducing stock and lowering capital investment across supply chain networks

• Improve quality of forecasts• Optimize transportation capacities to reduce costs and increase customer retention

Procure-to-pay management • Bundle purchases to maximize purchasing power and improve profit margins• Manage contractual agreements to optimize quantities ordered and reduce costs

of goods sold • Time orders to take advantage of price changes and limited offers from suppliers• Manage the rebate process efficiently and accurately

Supply chain execution • Manage and allocate warehouse tasks to avoid resource bottlenecks• Support direct store delivery• Help ensure compliance with regulations• Support a variety of trading practices

Order-to-cash management • Streamline processes to improve customer satisfaction and reduce costs• Optimize processing of back-to-back orders and act as a broker of products and services• Support direct price agreements between suppliers and customers, and the subsequent

settlement of price differences • Manage chargeback and commission processes efficiently and accurately

Financial management and analytics • Manage general and industry-specific processes in finance, human capital, operations support, and corporate services

• Develop insight and visibility with business intelligence and analytics functionalityIntegration of information, people, and processes

• Operate with a uniform technical architecture and solution platform• Create a flexible IT infrastructure encompassing SAP® and non-SAP software systems• Leverage existing IT infrastructure and reduce total cost of ownership

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“We can quickly meet customers’ specific requirements with the SAP solution. We have optimized our lead times, gone paperless in the warehouse, and overall have benefited from end-to-end logistics processes. It is now very important for us to improve our forecast and replenishment capabilities using this SAP functionality.”

Dr. Thomas Pirlein, Senior Vice President Corporate IT, Lekkerland AG & Co. KG

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