SAP Supply Chain Day - Gilles Fellous Sigma Aldrich

© 2013 Sigma-Aldrich Co. LLC. All rights reserved.

Leveraging Latest EWM & TM 9.0 Releases

in a Global SAP Reimplementation

sigma-aldrich.com

• September 2013

Gilles Fellous Senior IT Director

Distribution & Trade Compliance

[email protected]


• About Sigma-Aldrich

• Why an SAP Global Reimplementation Project?

– Current SAP Landscape

– Future SAP landscape

– Timeline & Execution Methodology

• Warehousing Solution(s)

– Challenges

– Findings

– Decision

• Transportation Solution(s)

– Challenges

– Findings

– Decisions

• Conclusion

2

Agenda


43%

37%

20%

GLOBALLY BALANCED 43% Total Americas

37% Europe, Middle East, Africa

20% Asia Pacific

$2.6 Billion 53%

24%

23% 21%

79%

BROAD END-MARKETS 53% Research

23% Applied

24% SAFC Commercial

QUALITY PRODUCTS >170,000 Reagents and

Chemicals

45,000 Laboratory

Equipment Items

$2.6 Billion >200,000

Products

• 9,000 employees

• Sales in 160 countries

• 1.4 million individual customers

• More than 50 offices in 30

countries

• Sigma-Aldrich manufactured

products generate 60%

approximately of Company sales

FACTS AND FIGURES KEY STATS

* 2012 Figures

DELIVERING VALUE THROUGH A DIVERSIFIED PORTFOLIO

NO CUSTOMER COMPRISES MORE THAN 2% OF SALES

NO PRODUCT COMPRISES MORE THAN 1% OF SALES

• “But several NASDAQ stocks that got little notice in 2000

turned out to be the real stars, including scientific gear maker

Sigma-Aldrich…Sigma-Aldrich is up 600% since 2000,

the best performance in the NASDAQ 100 after Apple.” Source: USATODAY.com – March 5, 2013

THREE TOP NASDAQ PERFORMERS

1.

2.

3.

38+ CONSECUTIVE YEARS OF EARNINGS GROWTH

Sigma-Aldrich at a Glance

3

http://www.google.com/url?sa=i&rct=j&q=apple+logo&source=images&cd=&docid=Q0fYEnFlH0D0cM&tbnid=YwrxJ9_Nx-GLAM:&ved=0CAUQjRw&url=http://www.fonearena.com/blog/52625/apple-reveals-q3-2012-earnings-net-profit-of-8-8-billion-35-billion-in-revenues.html/apple-logo-4&ei=OYdAUcCRO8LW2gXqzoHgAQ&bvm=bv.43287494,d.b2I&psig=AFQjCNGT_BD85z1yymHnDhVSgE9hHthPYQ&ust=1363269723577013


Examples of use:

• Products for biopharmaceutical drugs

• Advanced drugs intermediates

• APIs for small molecule drugs,

• Products for therapeutic products in

clinical trials.

• New LED precursor

Examples of use:

• new car smell

• tooth paste minty taste

• sports doping levels

• clinical and forensic toxicology

• CSI investigations

Examples:

• Eight million unique chemicals on

website

• Whole genome research

• Pharma & Biotech R& D

Sigma-Aldrich Market-Focused Business Units

4








– Challenges

– Findings

– Decision


– Challenges

– Findings

– Decisions

• Conclusion

5

Agenda


Import/Export Solutions

Germany SAP GTS

EMEA: cloud or broker

US: legacy + cloud

ROW: broker or local solution or

access DB solutions

Warehousing Solutions:

External WMS : Witron /Manhattan

RF: Teklogic, local legacy

Other: point solutions, access DB

Transportation Solutions:

Evcore, Clippership, Fedex, DHL , local

carrier platforms (Nordic, China, Latin

America) , Access DB (Japan, Israel,

else)

EXISTING NON SAP

Distribution Solutions

• COMPLEX

• OLD DESIGN

• HARD TO SUSTAIN

• POINT OF FAILURES

• LACK OF EFFICIENCY

• LACK OF FLEXIBILITY

• DUAL R/3 4.7 INSTANCES + OTHERS SYSTEMS

• INCONSISTENT VERSIONS AND UPGRADES

• > 13,000 CUSTOM OBJECTS, > 5 MILLION LINES

• MULTIPLE BEST OF BREED & POINT SOLUTIONS

• MULTIPLE INTERFACE TYPES

• LACK OF ACQUISITIONS INTEGRATION

Sales

Quote / Order

Processing

Pricing &

Variant

Configuration

Order

Tracking

Contracts /

agreements

Payment

Cards

Billing &

Outputs

Distribution

Delivery Due

and Shipping

Route Determi

nation &

carriers

Shipping &

Transportation

SAP

Warehouse

Management

Procurement

Direct

Procurement

Indirect

Procurement

Release

Strategy

MRP

Production

and Quality

Process

orders

Plant

Maintenance

PI Sheets

Inspection

Plans

Finances

Accounts

Receivable

Accounts

Payable

General

Ledger

Controlling &

Profitability,

Costing

Reporting &

GAAP

Trade

Compliance

Order

Screening

Haz Goods

regulations

MSDS

Imp / Export

GTS & FTZ

labels

EXISTING SAP SYSTEMS

Standard Configuration Custom code

Sigma-Aldrich Current SAP Landscape 1997-2013

6


7

• SAP ERP + SAP BEST OF BREED TIGHTLY INTEGRATED

• SINGLE SOURCE OF TRUTH FOR MASTER DATA

• UNIQUE USER INTERFACE

• ISOLATED MINIMUM TOUCH POINTS

• SIMPLIFIED

• FLEXIBLE

• SUSTAINABLE

• CONSISTENT

• FASTER M&A INTEGRATION

Sigma-Aldrich Future Landscape: SAP Greenfield Project


8

• Agile methodology allows for frequent inspection and adaptation, faster results,

more transparency and increased flexibility at a reduced investment.

Sigma-Aldrich SAP Next :Agile Execution Methodology

Go Live

Mid 2014








– Challenges

– Findings

– Decision


– Challenges

– Findings

– Decisions

• Conclusion

9

Agenda


10

Plant Purpose Locations Shipping Mnfng

Inventory

Owner-

ship

Current

System

Design

Model

Central Distribution Center

(very large & automated) USA (1), Germany (1) Y N SIAL

Manhattan (US) & Witron

(DE)

A

Regional Distribution Center

(medium to large)

USA (3), Canada, France, UK, Germany (2), Singapore, India,

China (2), Japan, Australia, Korea, Israel,

Brazil (2), etc.

Y N SIAL SIAL SAP B

Local Distribution Center (small)

US (1), Sweden, Ireland, Mexico, Argentina,

South Africa, Malaysia, etc.

Y N SIAL SIAL SAP C

Controlled Substances Storage

(tiny - legal purpose) France, Germany, UK Y N SIAL SIAL SAP C

Back-up Only Warehouse USA (2) N N SIAL SIAL SAP C

Indirect Plant w/ Inventory Planning

USA (2), Switzerland N N SIAL SIAL SAP C

Indirect Plant w/o Inventory Planning

35 (1 per country) N N SIAL SIAL SAP D

Manufacturing Plant

USA (15), Brazil, India (2), China (2),

Switzerland, Germany (4), UK (4), etc.

Y y SIAL SIAL SAP E

3rd Party Logistic or Vendor

USA, France, UK, India, Germany, Australia, NZ

Y N SIAL or 3PL or

Vendor

SIAL SAP or 3PL or

Vendor F

Customer Stock Room Management

Everywhere Y/N N Customer SIAL SAP F/G

Multiple Challenges

• 100+ plants worldwide

• variable purpose, size & models

• >1 million SKUs of all sizes

• Global and local regulations

• Avoid heavy custom solutions

• Transparent Plant switching.

• Best in class warehousing

• Best in class productivity

• Low touch user experience

Our Approach

3 months hands-on POC

comparing latest ECC6 WM &

EWM warehousing features

The Warehousing Challenge


System Score Comments

ECC6 WM ++ Has main features but limited breadth

SCE EWM ++++ Covers all requirements, high sophistication, easy to copy

SAP EWM Feature

• Allows design template library of storage types &

copy/paste easily to other plants

• Multiple put-away strategies are allowed

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Findings 1: Inbound Process & Storage Strategy

• A midsize plant (here Lyon) is >30

zones for storage/put-away strategy

• By hazardous material class

• By storage temperature

• By storage type (pallet, shelf, safe)

• By legal needs (customs zone, drug)



ECC6 WM + Has average features to address productivity – will need code

SCE EWM ++++ Optimized picking can bring walk <30 km/day & productivity lines/hour up 25%

Ability to organize packing by single shipping units (cartonization)

Lyon: Typical pick way and hot picking spots (flags)

• Current productivity has limiting factors

• Pick wave = 1-6 deliveries, each being multizone

• Approximately 45km total walk/day

• Max productivity in lines/hour is limited

• Packing needs heavy computer interaction.

• SAP EWM Feature

• Possible to manage various creation rules

of the picking warehouse orders (up to 7)

• Grouping of tasks per consolidation group

• Grouping of tasks to optimize the zone pick

& waves etc.

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Findings 2: Outbound Process Pick/Pack Productivity



ECC6 WM + Has ECC6/EHS checks foundation but limited room for expansion

SCE EWM ++ Together with TM, provides the basic foundation

Room to enrich via transport change (TM) or box split (EWM cartonization)

• SAP DG Solution findings

• Maintenance saving SAP regulatory content

• More robust than Sigma-Aldrich custom

• Strong match for quality “Yes/No” checks

• No “quantity-related” check for one/multiple chemical

• Block instead of providing alternatives by changing

mean of transports or splitting boxes

DG Analysis: Sigma-Aldrich Customs vs. SAP EHS/EWM

Sigma-Aldrich

Scenarios

Complexity

Data Collection &

Check

Check if Allowed

Incompatibilities

Limited Quantities,

separations (SPE)

Proposals: change

transports , split

boxes)

SAP DG Data

Collection & Check

SAP DG Check if

Allowed

SAP Incompatibilities

SAP Limited

Quantities,

separations (SPE)

SAP Proposals:

change transports ,

split box

SAP DG

GAP

SAP DG

MATCH

Sigma-Aldrich

coded Solution

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Findings 3 Outbound: Dangerous Goods (DG)

• Not fully addressing our needs but

reducing significantly the gap with

very strong foundation



ECC6 WM - Limited solutions – Sigma-Aldrich customs to be reproduced

SCE EWM ++++ Addresses most requirements

EWM Decanting Solution for packaging “make to order” bulk inventory & bringing raw material to manufacturing

EWM Value-Added Services Kitting: meet needs for individual kit components stored in various zones (hazardous material,

temperature) or for commercial bundles where items stored as individual SKUs.

Cross Docking EWM only provides sophisticated approach to replace custom code for 1) shipping backorders

from Goods Receipt and 2) bypassing storage in manufacturing to replenish DC.

End-User Experience EWM has native RF & voice and can include other visual, light and touch screen solutions.

14

Findings 4: Other Warehouse Functionalities


Coverage

• EWM fits multiple models from distribution to pure manufacturing.

• EWM is the fit for all our large and midsize plants.

• EWM with interface to automation seems best candidate for replacement of external

WMS.

Decision

• Sigma-Aldrich does not wish to have multiple systems, nor duplicated maintenance plus

additional custom code solution for smaller WM plants.

• With proper front end simplification, EWM could also be used for smaller plants.

Decision is to harmonize landscape & use EWM in all 70+ plants with managed

inventory.

Timetable

• Q2 2014: First pilot plant in midsize distribution center

• Q4 2014: Second pilot plant in midsize manufacturing site

• 2015 Global deployment

• After: Replacement of external WMS systems

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Warehouse Selection & POC Conclusions








– Challenges

– Findings

– Decision


– Challenges

– Findings

– Decisions

• Conclusion

16

Agenda


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• Multiple Challenges • Current SD transportation too limited

• 70% parcel (LTL, road & air)

• 30% large international (air, ocean)

• Complex global and local regulations

• Dangerous Goods

• Carrier documentation

• Carrier tracking

• Avoiding heavy custom solutions

• Provide Analytics for potential savings

Our Initial Approach Just plug SAP TM at the end of

shipping for leveraging module

execution, tracking and settlement

The Transportation Challenge

4 Transport Modes + Multimodal 200+ Carriers Labels, Pricing, Tracking

$$$ Savings and Analytic Hazardous / Non-Hazardous


• Air freight & Sea freight, TM does provide a strong foundation • Tendering booking, waybill

• Hazardous documentations (with same limitations as EWM)

• Road parcel management, TM does provide starting platform • Capacity management, road waybill is strong

• Hazardous documentations (with same limitations as EWM)

• No templates for main carriers (rate card, labels, EDI exchanges)

• No sophisticated parcel management solution

•

Settlement and self-billing, TM does provide a strong foundation • Strong settlement functionality

• Strong integration with ECC procurement and finances


SCE TM ++ Covers most requirements, but lot of work needed for

parcel management

Receive DTR

from ECC6

Update Freight

Order

Freight

Settlement

Transport

Charge

Management

Execution

Carriers

Outputs

DG

Outputs

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Findings 1: Expected TM Opportunities


• By Exploring features, we realized TM has the capacity to

introduce very significant process changes at Sigma-Aldrich:

1. Influence Value proposition to customers

2. Influence Planning and Operations

3. Impact more significantly our Transportation Spendings

4. Influence our global distribution network and role of each plant.


SCE TM ++++ Force Paradigm shift at Sigma-Aldrich

Receive OTR from

ECC6

Create Freight

Unit

Create Freight

Order

Planning

Order

Management

Optimiz

er

Freight

Tendering &

Booking

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Findings 1A: Unexpected TM Opportunities


• Our current customer front-end ,SAP and Web, shall move

to a “best in class” value proposal

• Current design lacks flexibility to new & local services due to SD

and Web custom code.

• Sigma-Aldrich offer can evolve to multiple services / delivery

proposal for multiple costs options and localized for each country

around the world.

• Seamless alignment between SD proposal and TM capability is

now possible without code.

Any SD order changes reflected seamlessly in TM

• Carrier flexibility since no longer “hard-selected” at order entry

• Guaranteed on-time delivery

• Missing: real-time link between SD ATP & TM optimizer

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Findings 2: Changes Introduced by TM in Our

Value Proposition to Customers

Example only: Copy of Public Amazon screen


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• We will build a “Never Late customer delivery” concept for a reduced operating cost:

1. TM planning optimizer regulates the overall workload: compute multiple criteria to determine best

carrier, priority, cut-off, DG solution, issue date and will trigger delivery creation only when needed.

2. Significant Operations productivity gains via planning, booking and standard documentation

3. Minimum 5% expected transportation savings for both domestic (optimizer) and international

(tendering) while streamlining process.

4. Switch allocation to various carriers , rationalization

5. Event management should enable us to identify incident and take immediate action / new planning.

6. Customer delivery date will always be on time or earlier for a lower transportation cost.

Findings 3: Changes Introduced by TM in

Shipping Operations


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• TM enables key global and complex functionality we could never do easily before:

1. Multi-modal consolidation/deconsolidation will change dramatically our transatlantic

distribution replenishment planning approach.

2. Global drop shipment directly to end customer is now possible by coupling international

transport with GTS customs operations.

Findings 4: Changes Introduced by TM to our

Global Distribution Network


Coverage: • TM covers very well air and sea freight while more limited for road parcel

management.

• TM is enabling transportation savings.

• TM is supporting major business changes and impacting ECC6 and other SAP

modules.

• TM can be automated for domestic planning and almost transparent to small

plants.

• TM together with EWM provide strong combination while avoiding unnecessary

interface complexity.

Decision Decision is to leverage all TM capabilities and opportunities for business

changes.

Timetable • Q2 2014: First pilot plant in midsize distribution center

• 2015: Global deployment

• 201x: Continuous enhancement and network redesign

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Transportation Solution TM Conclusion








– Challenges

– Findings

– Decision


– Challenges

– Findings

– Decisions

• Conclusion

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Agenda


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Customer Opportunities

• EWM and TM appear to be amongst market leaders

for best of breed.

• EWM is addressing warehouse execution only.

• TM reaches out over all company processes.

• Global templates can be easily replicated.

• Tight Integration of EWM, TM, ECC6, EHS & GTS

Key Expected SAP Improvements

• TM features for parcel management

• Enhancement of dangerous goods toward more

proactive proposals

• Direct interface between EWM and TM to reduce

complexity

EWM

Extended Warehouse Management DG

Conclusion: Our Distribution & Trade Compliance

Landscape

SAP Supply Chain Day - Gilles Fellous Sigma Aldrich

Technology

Transcript of SAP Supply Chain Day - Gilles Fellous Sigma Aldrich