Sunil SrinivasanEnterprise Solution ArchitectSAP India

SAP SNC –Supply NetworkCollaboration

1.Business Background and Big Picture2.SAP SNC Product Overview3.Customer Examples

Agenda

1. Business Background and Big Picture2. SAP SNC Product Overview3. Customer Examples

Agenda

Lack of VisibilityBeyond the FourWalls

Poor CustomerService

Globalization andOutsourcing

Customer Challenges and Trends DriveStrategy for Supply Chain Collaboration

Supplier On/offboarding

Manual partner interaction:expensive, error-prone andslow

How Is SAP Addressing the ChallengesEnabling Adaptive Supply Chain Networks

Improve Customer ServiceSense and respond to real time supply anddemand signals

It is all about adaptability and managing the networkSAP Network Supply Collaboration

Globalization & OutsourcingUnderstand the Customer DemandInclude your Suppliers into your NetworkEnable visibility into your outsourcing partners

VisibilityTreat suppliers, outsourcingpartners, customers and serviceproviders as an extension ofyour organization

Combining Efficiency & ResponsivenessDevelop and Leverage Core Capabilities in theNetwork

Collaborative Demand andSupply Planning

Increase Supply NetworkVisibility & Collaboration

Manage Risk and EnsureCompliance

Streamline Logistics andFulfillment

Increase Real WorldAwareness

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

SAP Supply Network Collaboration – A 360°View On Collaboration

Extend Your Enterprise to Encompass Suppliers, ContractManufacturers and Customers

Out-of-the-Box Collaborative Business ProcessesIntuitive, Easy to Learn, and Easy to Use Web-User InterfaceStandards-Based & Service-Enabled Connectivity Between Your SAP ERP and PartnerSystems

Suppliers

Contract Mfg

CustomersMy Company

“360° Collaboration”

1. Business Background and Big Picture2. SAP SNC Product Overview3. Customer Examples

Agenda

What is SAP SNC?

It’s a supply chain collaboration application, but ithas several different dimensions:

Collaboration & Visualization Layer to External PartnersShow e.g. PO’s, Forecasts and Inventory from internal systems (ERP), encompassing the use of exceptionmanagement. Extending processes running in internal systems.

Allow partners to update information and respond back to internal systems (e.g. PO confirmations, ASNs, ForecastResponses). Collaborate and capture commitments from partners.

Consolidate many internal systems into one SNC system, provides “one” comprehensive, simplified and consolidatedview to the outside world.

Enabler of New Business Processes on top of Internal SystemsResponsive Replenishment (next-gen VMI), Work Order collaboration with contract manufacturers and Supply NetworkInventory providing cross-tier/cross-partner visibility to supply, demand and inventory that go above and beyond whatERP systems provide.

New processes integrate to existing internal (ERP) systems on buy and sell side, adding process value.

Multi-Mode Communication Layer to External PartnersMessage-Based Communication like XML (B2B), File Sharing (Excel up/downloads), E-mail exchange w/ attachmentsand 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 RawMats/Components, Contract Mfg andCustomer Collaboration

My Company

PO Process

Release Process

SMI Process

Kanban Process

DR (Forecast) Process

Work Order Process

SNI Process

Raw Material/Component Flows Contract Mfg:ing Flows

DCM (Reorder) Process

CMP (Subcon PO) Process

Min/Max VMI

Demand Collaboration

Finished Goods Flows

Responsive Replenishment

Key Capabilities:Raw Mat/Component Supply & Contract Mfg

My Company

PO Process

Release Process

SMI Process

Kanban Process

DR (Forecast) Process

Work Order Process

SNI Process

Raw Material/Component Flows Contract Mfg:ing Flows

DCM (Reorder) Process

CMP (Subcon PO) Process

Additional Features:Cross-tier Visibility of Demand and Inventory Enabled Via SNI. WO Allows for Automated ProductionProgress UpdatesInvoices (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 SuppliersAutomated, optimized communication (e.g., EDI)with typical business pain points, such as:

Expensive connectivity effortsPoor visibility of mid/long-term forecasts,inventory, and capacityLow supplier performance accuracyDisconnect between public and privateprocesses

Non-Strategic SuppliersUnstructured, not optimized communication (e.g.,Phone, Fax) with typical business pain points, suchas:

Unsynchronized supply and demandsituationLong order cycle timesDisruptions from last-minute changesImmense maintenance efforts of dataHigh supply risk and costs

High spend, high-volumelarge suppliers

Low spend, low-volumesmall suppliers

CUSTOMER

Reaching “Long Tail” of suppliers requiresmultiple modes of connectivity

WebBrowser

WebBrowser

SAP NetWeaver

Low Volume –Web Browser

SAPXI

High Volume –B2B Integrated

BackendSystem

BackendSystem

ERPBackendSystems

Up/DownLoad FilesUp/DownLoad Files

Mid Volume –File Up/Down

Loads

Browser

XML

File Up/Down Load

SNC

BUSINESS PARTNERSSuppliers and Contract Mfg:ers

Kanban Dashboard

The DIMP Kanban Board displays Control Cycles for materials supplied throughdifferent suppliers.

Supplier: AAT_BAMBE

Supplier: AAT_TROY

Create a new Kanban Jit Call

Customer Collaboration with SAP SNC

My CompanyCustomers

Responsive Replenishment . . .Is a real-time, demand-driven, replenishment scenario between supplier and customer including up anddown 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 truckloads

VMI Min/Max Replenishment . . .Allows for traditional VMI replenishment scenarios using maximum and minimum stock limits as driverCan 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 consensusforecast between customers and suppliers

Inventory and SalesHistoryForecast

CollaborationPromotion Planning

PromotionOrders

ReplenishmentOrders Planning

Truck Loads (PO andSales Orders)

Forecast and ShortTerm Forecast

Main Features: Customer Collaboration –Benefits

Business BenefitsIncreased sales and lower lost salesthrough prevention of stock-outs, especiallyduring promotionsImproved responsiveness to short-termfluctuations to customer demand esp.during promotionsIncreased cash-flow through reducedinventory and faster order cycle times whileincreasing service levelsImproved asset utilization through highertruck capacity utilization and increased userproductivity

1. ControlledData Import

3. ResponsivePromotionPlanning

6. Order Processing& Delivery

4. Replenishment& Transport Load

Building

2. ResponsiveForecasting

5. Order Generation

IT BenefitsPre-delivered scenario and leanimplementationSAP‘s platform for Supply NetworkCollaboration (incl. customer & supplierCollaboration scenarios e.g. SMI, CPFR)

Supply Network Collaboration

Lower costs & increased revenuesReduced inventory levelsFaster order-to-cash cycleIncreased inventory turnsImproved asset utilization

Improved CollaborationCollaborate in real timeFewer phone and fax inquiriesAutomated Processes

Enhance VisibilitySupply Network visibilityAnticipate supply delaysRespond to demand changes

Increase ControlManagement by exceptionManage riskBetter capacity utilization

Improve Customer ServiceIncrease order fill rates

1. Business Background and Big Picture2. SAP SNC Product Overview

3. Customer Examples

Agenda

SAP SNC (ICH) Reference CustomersFeb 2009

Customer Snapshot:460 + Global Customers200 + Active CustomersAppr.75 Live CustomersAppr.25 ReferenceCustomers

Notable Live Customers – SAP SNC

Honeywell Thales Avionics Medtronic

Colgate P&G Unilever Hindustan

Embraer Sauer-Danfoss Kellogg

GE (Fanuc) Sidel Eli Lilly

Bell Helicopter Alpine Electronics Cartier-Richmont

Grundfos General Mills Hans Grohe

Roche Diagnostics HP Wincor Nixdorf

Knorr-Bremse Kostal Mahle

Nobel Biocare Novartis Bang & Olufsen

DirecTV Philips Harman Becker

Kraft Foods Ritter Sport Daikin

Flextronics Weber Grills Johnson & Johnson Consmr.

BEML Rohde & Schwarz Bayer

Kaeser Kompressoren Festo

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

Ericsson AstraZeneca Palm

Conair Lexmark Pepsico

Coca-Cola Lockheed Martin Applied Materials

Unilever England Perrigo Lexmark

Rockwell Automation Endwave Eli Lilly

Yazaki Automotive Lennox Kimberly-Clark

Draeger Roto Frank Johnson & Johnson Medical

Eli Lilly (upgrade) Caterpillar Daimler

Ford Honeywell HP (roll-out)

L’Orange Melitta Nestle

Nortel Networks Osram Panasonic

Philip Morris Sappi Shell

Siemens Whirlpool Novo Nordisk

DIRECTV

Suppliers are responsible for inventory management processesIncreased visibility across the supply chainAutomated key business processes with suppliers resulting in high dataand decision accuracyBang & Olufsen

Integrated four Baan ERP systems to one SNC instance using webservices provided by SAPOn-Boarded 10,000+ Suppliers and 12,500+ Supplier Users in 2 years(March 2009)Flextronics

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

Philips ConsumerProducts

SAP SNC / Manufacturing Network Planningand ExecutionSelected Customer Examples

Increased supply chain velocity and volumeReduced data and decision latency3 – 5 times improvement in purchase order productivity

Customer example:Supplier Collaboration @ Flextronics 1/2

Challenges and OpportunitiesLegacy supplier collaboration platform not scaling with Flextronics‘growthSolution instability impacting business and supply chain efficiency

ObjectivesIncrease buyer / supplier performanceReduce purchasing transaction costIncrease supply chain data integrity, availability and visibilityImprove operational efficiency

Why SAP and enterprise SOASOA enabled multiple interaction points (Excel, B2B, etc.) over asingle processEasily configurable solution: separation of process steps from theservices 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 partyservices and solutions, both from in-house run applications orsoftware sourced as a service

Flextronics Inc.Location: San Jose, CAIndustry: ComputerProducts and Services: ElectronicsManufacturing Services (EMS) providerRevenue: US$33.6 Billon (2008)Employees: 162,000 (Mar 2008)Web Site: http://www.flextronics.comSAP Solutions and Services:SAP SNC 5.0, eSOA Proof-of-ConceptPartner: none

“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 ClarkDirector of ITFlextronics Inc.

Customer example:Supplier Collaboration @ Flextronics 2/2

Flextronics Inc.Location: San Jose, CAIndustry: ComputerProducts and Services: ElectronicsManufacturing Services (EMS) providerRevenue: US$33.6 Billon (2008)Employees: 162,000 (Mar 2008)Web Site: http://www.flextronics.comSAP Solutions and Services:SAP SNC 5.0, eSOA Proof-of-ConceptPartner: none

“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 ClarkDirector of ITFlextronics Inc.

Implementation Highlights

PO Collaboration – Web-based collaboration toolthat manages the full Purchase Order lifecycle

Dynamic Replenishment – Web-based collaboration toolthat manages the Forecast process

Exception Management – ERP based exception reportsthat enables buyers to manage POs by exceptions

Exchange Infrastructure (XI / PI) – EAI/B2B middlewarewhich enables integration among various applications andsupply chain partners

POC to assess robustness and scalability of SAP SupplyNetwork Collaboration

Statistics (Apr 2008)Transaction volume of 200K per week

Penetration: 36 Sites

Supplier Locations: 4300

Supplier Partners: 2000

© SAP 2008 / Page 25

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