Post on 05-Sep-2018
PUBLIC
The Business Value for Supply Chain with SAP S/4HANA, Cloud/ Line-of-Business Applications and SAP Leonardo
Transform Supply Chain with SAP
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Hear from Microsoft executives on how
they are using SAP IBP to realize their
Innovation Supply Chain. The solution
helps the company build a demand-
driven supply chain, that understands
and fulfills consumers’ demand at their
request and meets their expectations.
SAP Integrated Business Planning (SAP IBP) live at Microsoft Corporation
3PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
The information outlined below will help you understand the contents of this value proposition white paper. It gives details on the objectives and scope of the paper. Key definitions are also provided.
DELIVERABLE OBJECTIVE
Provides information on the value in moving from an ERP on a
traditional database to SAP S/4HANA, Cloud/ Line-of-Business
(LoB) applications and SAP Leonardo solutions.
.
KEYDEFINITIONS
Within the process and subprocess deep dives, there is detailed
content in table format articulating the following:
Typical Pain Points
Major customer business and IT challenges.
Current State with ERP on Traditional Database
ERP capabilities that are available on a traditional database.
SAP S/4HANA Capabilities
Capabilities shipped with the latest release of SAP S/4HANA,
including apps that are optimized for SAP Leonardo, such as an
app for contract consumption.
Cloud/ LoB and SAP Leonardo Solution Capabilities
Solutions that can be integrated with SAP S/4HANA and provide
business value ‒ for example, the SAP Integrated Business
Planning solution or SAP Connected Goods software. These
solutions are not embedded in SAP S/4HANA but these can be
integrated.
With the value proposition section, all quantified
benefits are conservative, estimated improvement
ranges tied to the top value drivers. They are based on
early adopters or new developments and enhancements
of SAP S/4HANA, Cloud/ LoB applications and SAP
Leonardo solutions that can drive value. Keep in mind
that these benefits should be used as a guide. We
recommend working together to assess your current
maturity and the value of moving to SAP S/4HANA,
Cloud/ LoB applications and SAP Leonardo solutions to
develop a personalized business case.
*Detailed road map available on SAP.com
(customer login required)
This document and SAP’s strategy and possible future
developments are subject to change and may be
changed by SAP at any time for any reason without
notice. This document is provided without a warranty of
any kind, either express or implied, included but not
limited to, the implied warranties of merchantability,
fitness for a particular purpose, or non-infringement.
Last Update
SAP S/4HANA 1709 release. All Leonardo capabilities are highlighted in bold.
Business Benefits
Key value drivers that are impacted by the adoption of
SAP S/4HANA, Cloud/ LoB applications and SAP
Leonardo solutions.
White Paper Background and Key Definitions
PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
2018: Planned Innovations*
New functionalities planned for the 2018 release of
SAP S/4HANA, Cloud/ LoB applications and SAP
Leonardo solutions.
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Agenda
Supply Chain Overview
Digital Priorities
End-to-End Business Scenarios
Process Deep Dive
Customer References
Appendix
Value Proposition Summary
5
8
11
21
22
23
25
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TRANSFORM SUPPLY CHAIN WITH SAP
Supply Chain in a Digital Economy
Digitization of the economy is continuing to accelerate the pace of innovation, shortening the product lifecycle and increasing the
demand volatility. At the same time supply chains are becoming global and increasingly complex. To be in a position to create and
capture opportunities, companies must develop an environment in which they can manage information and processes simultaneously
across the extended supply chain. This evolution of supply chains is more connected, intelligent, responsive, and predictive. It enables
companies to drive customer-centric processes and deliver personalized products uniquely built and delivered for the “segment of one.”
These demanding customers have to be serviced across a business network of global partners that are increasingly challenged by
resource scarcity. This transformation will continue to impact the business processes and systems that are required to remain
competitive. It will change how we design, plan, make, ship, and operate our products and assets.
SAP S/4HANA Supply Chain, cloud applications such as SAP Ariba solutions and SAP Integrated Business Planning, and SAP Leonardo
support a digital supply chain strategy with a digital value network that acts as an enabler for business transformation. The digital value
network starts with a digital core that interconnects all aspects of the value network in real time to drive business outcomes. The digital
core not only connects every aspect of internal operations but also enables real-time workforce engagement, supplier collaboration,
outcome-based omnichannel consumer experience, and other market dynamics with Internet of Things (IoT) and Big Data scenarios.
Warehousing and Transportation on
One Platform
Demand Driven Material Requirement Planning
(DDMRP)
Live InventoryManagement
Predictive Forecasting and Demand Sensing
Short-term demand
prediction with demand
sensing algorithms .
Remote capture and
analysis of sensor data from connected devices and
feeding to demand
management process.
Live inventory management
enabling unlimited
simultaneous material movements and allowing for
true transparency on
inventory and material flows.
Decreased stock buffers due
to better transparency and insights.
Single warehousing
platform for all warehousing
operations, including optimization, automation,
and labor management.
Single transportation
platform with basic and
advanced shipping functionality and real-time
embedded analytics.
Dynamic planning of
replenishments with DDMRP
which is fully integrated into existing MRP concept.
Replenishment only for real
demand and introduction of buffers at strategically
important points.
Prestige Brands
Prestige Brands Implemented the SAP® Integrated
Business Planning Solution to support account
planning
“ With SAP Integrated Business Planning, our
sales VP can do annual sales quota planning in a
few hours compared to days. All sales team
members can collaborate and achieve
consensus sales forecast numbers centrally and
provide visibility to the management team
instantaneously. Bizbrain Technologies
delivered this project, from concept to going
live, in 12 weeks. This is a very fast ROI. ”
Matt Flood, Vice-President and CIO, Prestige
Brands Holdings Inc.
Gulftainer
Gulftainer Implemented SAP S/4HANA to meet its
current and future requirements
“ At Gulftainer, we are committed to providing the
highest standards of operational efficiency. SAP
S/4HANA will enable a more efficient, cost-
effective movement of international business
through our terminals, providing the actionable
data necessary to increase productivity and
reduce costs. ”
Ramesh Shivakumaran, Group Director Business
Services, Gulftainer Company Limited
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
6PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP SUPPLY CHAIN VALUE PROPOSITION SUMMARY
SAP solutions enable companies to substantially enhance, simplify, and visualize the entire supply chain process.
Reduced Days in Inventory with Live Inventory Management and Demand Driven MRP (DDMRP)
Live inventory management through a redesigned data model
enables unlimited simultaneous material movements and allows
for true transparency on inventory and material flows. It also
provides improved material planning with faster, more frequent
Material Requirement Planning (MRP) runs – multiple times a
day, with planning and rapid replanning in minutes instead of
hours to minimize inventory. It is now possible to replenish only
for real demand and introduce buffers at strategically important
points (Demand Driven Material Requirement Planning -
DDMRP).
Reduction in Revenue Loss Due to Fulfillment Issues with Advanced Available to Promise (AATP)
The solution enables intelligent, real-time product availability
check for sales, planned and production orders. It includes
scalable Available to Promise (ATP) for managing large
transaction volumes and flexible allocation management
capabilities. It provides back-order processing with intuitive
priority classification and interactive exception handling.
Reduce Overall Supply Chain Planning Cost with What-If and Scenario Planning
S/4HANA digital core in conjunction with SAP Integrated
Business Planning for sales and operations enables integrated,
continuous and iterative supply chain planning. It includes what-
if and scenario planning to react to market demand through the
best service at lowest cost. Manufacturing costs and premium
freight expenses are reduced with detailed constrained planning
and scheduling, enabling agility and efficient use of capacity.
Improved Supply Chain Planning FTE Productivity with SAP Integrated Business Planning and SAP Fiori
Supply chain planning productivity is enhanced through easy-to-
use Microsoft Excel and analytics-based planning interfaces in
conjunction with SAP Integrated Business Planning (IBP). This
helps production and material planners execute critical daily
tasks with embedded decision support analytics and SAP Fiori
role-based user interface applications.
Reduced TCO Through Landscape Simplification with Embedded Solutions in SAP S/4HANA
Faster business outcomes are achieved with reduced
operational cost, thanks to simplified system landscapes.
Redesigned data structure and embedded solutions in SAP
S/4HANA result in fewer systems and interfaces. For example -
SAP Extended Warehouse Management
(SAP EWM) and SAP Transportation Management (SAP TM)
applications embedded in the SAP S/4HANA core.
PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
7PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP’s Digital Business Framework for Supply Chain
SAP Ariba Solutions for Direct Spend
• SAP Ariba Supply Chain Collaboration
• SAP Ariba Strategic Sourcing Suite
• SAP Ariba Supply Chain Mobile App
Ariba Network (integrating the entire buying process for the organization)
SUPPLIER COLLABORATION
SAP Integrated Business Planning (IBP)
• IBP for Response and Supply
ASSETS AND SUPPLY CHAIN
SAP Leonardo
• SAP Vehicle Insights
• SAP Asset Intelligence Network
• SAP Global Track and Trace
• SAP Predictive Maintenance
SAP Integrated Business Planning (IBP)
• IBP for Response and Supply
• IBP for S&OP (Sales and Operations Planning)
• IBP for Inventory
• Supply Chain Control Tower
CUSTOMER EXPERIENCE
• SAP Hybris Cloud for Sales
SAP Integrated Business Planning
(IBP)
• IBP for Demand
SAP Leonardo
• SAP Connected Goods
SAP solutions enable organizations to drive business value across their end-to-end digital value chain.
WORKFORCE ENGAGEMENT
• SAP Fieldglass solutions
• SAP SuccessFactors solutions
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
S/4HANA DIGITAL CORE
• Extended Warehouse Management
• Transportation Management
• Extended Production Scheduling and Delivery Planning
• Advanced Inventory Management
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End-to-End Business Scenarios
‘Plan to Position’ is an end-to-end supply chain planning scenario which relates to
production, procurement and positioning the product in the supply chain in anticipation
of demand.
The scenario starts with setting business objectives and includes the tactical and
operational decisions to set the demand plan, capacities and inventory targets.
‘Order to Delivery’ is an end-to-end supply chain planning and execution scenario which
relates to efficient order fulfillment and delivery.
The scenario starts with capturing a sales order and includes order confirmation,
material requirement planning , production, procurement and ends with material
dispatch.
Some organizations measure value by the impact to their end to end processes. Outlined below are the primary end-to-end processes that are
important to a supply chain organization.
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
1. PLAN TO POSITION
2. ORDER TO DELIVERY
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Traditional Planning
Reimagine Plan to Position
TOP VALUE DRIVERS
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
The New World With SAP
SupplyPlanning
Demand Planning & Sensing
Demand Planning
Integrated Business Planning
Response & Supply Planning
Scenario Planning & collaboration
Sales & Operations Planning
Alignment between sales plan
and capacity plan excluding
inventory targets
Limited financial alignment with
business plan
Classical statistical forecasting
and consensus demand planning
process based on historical data,
often leading to unsatisfactory
accuracy
Propagation of supply requirements
through company’s network with
limited consideration of business
priorities and no connection to
fulfillment planning
Holistic alignment to business
plan including financials and
inventory target setting,
supported by internal
collaboration
Finite planning based on optimization
or business priority rules,
coordinated electronically with
trading partners, with full pegging
visibility and generation of allocation
plans to govern order promising
Full visibility to demand and
supply across the extended
network, to simulate changes
to plan, with root cause
analysis to understand and
resolve issues
Demand plans consider demand
signals from orders, shelf, and
web with intelligent adjustments
to eliminate bias and determine
optimum forecast parameters
Use of emails, phone calls, and
spreadsheets to resolve issues
when there is a supply
disruption or a demand change
to determine how to respond
ManualAdjustment
Reduce Supply Chain Planning Cost Increase Forecast Accuracy Reduce Revenue Loss due to Fulfillment Issues
10PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Traditional Planning
Improve Customer Service Reduce Inventory Carrying Cost Reduce Logistics Cost
Reimagine Order to Delivery
TOP VALUE DRIVERS
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
The New World With SAP
PurchaseRequisitioning/ Production
Live MRP
Scheduled MRP
Online Order Confirmation
PurchaseRequisitioning / Production
Sales order confirmation
Delivery commitments
based on outdated data,
resulting in cancelled or
delayed orders
No ability to re-run MRP
during the day. Material
shortages not known
instantly, delaying
production
Up-to-date inventory
information resulting in
realistic fulfillment
commitments. Rule-
based product allocations
MRP runs possible
multiple times a day.
Material shortages
identified instantly
Inventory Management
Inventory Management
Outbound Delivery, Transport Planning
& Dispatch
Outbound Delivery, Transport Planning
& Dispatch
In-Transit tracking
In-Transit tracking
Minimized safety stock
with just-in-time material
availability
Single warehousing
platform for all
warehousing operations
No way of knowing if a
reliable supplier nearby
could have delivered the
missing part in time
Delayed material
postings due to high
volume of production
transactions. Inability to
respond to production
issues on time
Automated decision
recommendations and
integrations in to Ariba
network quickly locates
the best supplier
Minimized safety stock
with just-in-time material
availability
Sales Order Capture
Sales order Capture
Increased safety buffers
to make up for the lack of
inventory invisibility,
locking up capital
Interface needed
between ERP and
extended warehouse
management application
No ‘out of the box’ event
tracking capabilities
Analytics and reporting
done in a separate
business warehousing
system with no real time
data update
Transportation process
taking place in disparate
systems with inefficient
business partner
collaboration
Limited optimization
possibilities
Insights in to
transportation
execution, tracking
goods and assets in
transit (SAP Global track
and Trace)
Analyze vehicle and
sensor data in real time,
optimizing logistics and
improving service ( SAP
Vehicle Insights)
Single platform for
transportation
management with real-
time embedded analytics
Capacity management,
planning, collaboration
execution, charge
management and
settlement in one system
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SUPPLY CHAIN MANAGEMENT (SCM) CAPABILITIES
Outlined below are the primary capabilities for SCM where value can be achieved through SAP S/4HANA,
Cloud/ LoB applications and SAP Leonardo solutions.
Digital Business Planning
• Demand Management and Insights
• Sales, Inventory and Operations Planning
• Response and Supply Management
Digital Logistics and Order Fulfillment
• Warehouse Management
• Transportation Management
• Logistics Network
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 Planned Innovations
BusinessBenefits
• Inability to include
real-time, changing
demands in the planning run leads
to outdated and
inaccurate planning
• Basic demand planning
features exist with
limited ability to sense or predict short-term
demand based on
growing number of demand signals
• Provides a real-time
order management
platform for omnichannel demand
management
• Changes in demand are visible without waiting
for lengthy batch
processes. Orders are prioritized and tightly
integrated with supply
and fulfillment
• Short-term demand
prediction with demand
sensing algorithms and forecasts for medium to
long-term demand with
advanced statistical forecasting methods
(SAP Integrated Business
Planning)
• Product lifecycle
management tools for
generating statistical forecasts on new products
(SAP Integrated Business
Planning)
• Remote capture and
analysis of sensor data
from connected devices,feeding to demand
management process (SAP
Connected Goods)
• Enhanced demand
management
process including product lifecycle
management and
product segmentation
capabilities
(SAP Integrated Business Planning)
• Operational master
data and order data integration with
transactional system
(SAP Integrated Business Planning)
• Increased forecast
accuracy
• Reduced demand planning and
forecasting cost
• Difficult to drive
Sales and
Operations Planning (S&OP)
process with
executional ERP system, which
causes planning to
be done in a slow, manual process
with inconsistent
information across functional areas
• Collaboration around a
sales and operations
plan needs separate integration; difficult to
analyze different
scenarios of future demand and supply
and hard to come up
with actionable plan
• Provides an integrated
SAP HANA platform to
support demand-driven business planning
processes, including
real-time analytics across demand, supply,
and finance
• Rapid and collaborative S&OP, including “what if” and scenario planning of different potential business plans, to allow business stakeholders and functional leaders to agree on and execute desired path forward (SAP Integrated Business Planning)
• Workflow and
approval process as
part of the sales and operations process
(SAP Integrated
Business Planning)
• Reduced overall
supply chain
planning cost
• Reduced sales and
operations
planning cycle time
(continued next page)
Digital Business Planning Deep Dive
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
13PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
(continued next page)
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
capabilities
2018 PlannedInnovations
BusinessBenefits
• Long batch run
processes lead to
inefficient planning
• Manual resolution
on material
bottlenecks, heavy use of side by side
tools to simulate
• Inability to include the real-time
changing demands
in the planning run and analysis leads
to outdated and
inaccurate planning decisions
• Planning runs at predefined times without real-time data
• MRP lists are working with snapshots of the planning situation during the planning run
• Accelerated MRP:
improved effectiveness
of planning, up to 10x faster, enabling more
frequent MRP runs –
multiple times a day
• (Live) MRP: one single
harmonized MRP
process for all materials, both
unconstrained and
those requiring advanced constraint-
based planning
• MRP (cockpit) provides real-time insights into
material availability
• Supply planning beyond MRP in conjunction with S&OP to provide unconstrained or constrained (optimized) supply plans (SAP Integrated Business Planning)
• Rapid and collaborative S&OP, including “what if” and scenario planning (SAP Integrated Business Planning)
• Improved usability with new MRP planning board and (near) real-time integration with SAP Integrated Business Planning
• Reduced overall
supply chain
planning cost
• Improved
manufacturing
function planning efficiency
• Reduced revenue
loss due to stock-outs
• Improved
manufacturing function planning
efficiency
• Inability to support
demand driven
supply chain. Individual and siloed
solutions for
demand generation and supplier
collaboration leads
to inefficient supply chain processes
• Forecast is generated
in a separate system
and there is no direct communication to the
suppliers on the same
• Directly share forecast and
orders generated by SAP
IBP (Integrated Business Planning) with suppliers
via Ariba Supply Chain
Collaboration (SCC) solutions
• Reduce revenue
loss due to
fulfillment issues
• Reduced overall
supply chain
planning cost
Digital Business Planning Deep Dive
14PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
TYPICAL PAIN POINTS
Current State with ERP on Traditional
Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 PlannedInnovations
BusinessBenefits
• Too much working
capital in the
supply chain leading to low
inventory turns
and, at times, subpar customer
service levels
• Whiplash effect inwhich forecast
yield supply chain
inefficiencies
• Difficult to predict
individual
consumer demand and
supply the same,
without increasing the stock
• Difficult to
determine
optimal inventory targets across
the supply chain,
so companies are left with having to
estimate these
manually
• Personalized and
dynamic planning of
replenishments withDemand Driven
Material Requirement
Planning (DDMRP), which is fully integrated
into existing MRP
concept
• Replenish only for real
demand and introduce
buffers at strategically important points
(DDMRP)
• Real-time analytics across all data held in
SAP S/4HANA,
covering orders, invoices, inventory, and
costing information
• Determination of optimal
inventory targets across
multiple echelons of raw material, work in process,
and finished goods
inventory, enabling supplychain to operate with less
working capital while
maintaining target service levels
(SAP Integrated Business
Planning)
• Uncertainty index and
expected service-level
calculation for inventory optimization
(SAP Integrated
Business Planning)
• Demand driven
replenishment: Time
dependent buffer levels, Buffer
monitoring in planning
and execution
• Reduced
days in
inventory
• Increased
inventory accuracy
• Lack of visibility into
the end-to-end supply
chain leads to poor decision support and
slow corrective
actions
• Supply chain
analytics possible
using an online analytical
processing (OLAP)
engine like business warehouse (BW);
the data is not real
time
• Embedded
analytics allow on-
the-fly simulations with real-time
data; user- and
use-case-centric views are also
supported
• Empowersbusiness users
to perform ad hoc analysis
in real time with alerts, KPIs, reporting, and
insights that detect and
notify users of potentialdisruptions (SAP
Integrated Business
Planning)
• Enhanced process
visualization,
automation, and collaboration,
including work flow
and approval process
• Collaborative planning
on the network with
SAP Integrated Business Planning and
the
Ariba® Network
• Improved supply
chain planning FTE
productivity
• Reducedoverall
supply chain
planning cost
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Digital Business Planning Deep Dive
15PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 Planned Innovations
BusinessBenefits
• Missing visibility and control of material movements across the network
• Batch-based
processes and
lack of real-time
monitoring result
in poor on-time
delivery
performance
• IT complexity with
the need to
maintain
interfaces
• Data duplication
due to separate
warehousing
systems, adding
to complexity
• Visibility on overall
progress across
system boundaries;
ability to achieve
overview on material
flows messaging
interface between ERP
and extended
warehouse
management
application
• Limited wave
management and
warehouse
optimization
capabilities
• Limited capabilities in
the area of cross
docking, labor
management, quality
management
• No standard UI
capabilities for end to
end user experience
• Single warehousing platform for all warehousing operations, including optimization, automation, and labor management. This is enabled by SAP Extended Warehouse Management (EWM) embedded in the SAP S/4HANA core
• Mapping the entire
warehouse complex in
detail in the system, down
to storage bin level with
real time visibility of labor,
resources and activities,
using warehouse monitor
• One system (master data, customizing, and UX) for reduced data redundancy, lean processes with fewer business documents, and overall simplification
• New and improved FIORI apps available for warehousing clerks
• SAP EWM deployed
as a stand-alone
application for high-
volume and highly
automated
warehouses
• Improved user
experience with new
SAP Fiori apps related to
– task confirming,
inventory counting,
outbound packing and
e-commerce returns
• Advanced QM
Integration
• Additional embedded
analytics for EWM in the
area of labor
management reporting
• Improved integration to
inventory management
related to customer-
owned stock and
separation of storage
location assignments
• Comprehensive
integration of item
unique identification
data and ammunition
management in the area
of defense
• Stock in Transit:
Mitigate production
risks by forecasting
stock in transit delays
• Reduced
total
logistics
cost
• Reduced
warehouse
operating
cost
• Increased
inventory accuracy
• Reduced order
fulfillment lead time
• Reduced TCO
through
landscape
simplification
Digital Logistics & Order Fulfillment Deep Dive
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
(continued next page)
16PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
(continued next page)
TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 PlannedInnovations
BusinessBenefits
• Lack of accurate up-to-date inventory data, lead times, and procurement timings for the planning leads to an inefficient planning process
• Low inventory
throughput
prevents live
inventory
updates
• Inventory status is
calculated overnight
• Live inventory updates
are not available;
inventory status is
reflected in the system
with time offset
• Inventory throughput may
reach boundaries
depending on business
scenario
• Live inventory
management through
redesigned data model
enables unlimited
simultaneous material
movements and allows for
true transparency on
inventory and material
flows
• Ability to change lot size to
“one,” thus capturing the
lowest level of granularity in
inventory stock keeping
• Decreased stock buffers
due to better transparency
and insights
• Availability of goods receipt
including stock in transit and goods receipt of
blocked stock
• Catch Weight
Management (CWM)
and Direct Store Delivery ( DSD)
functionalities for the
customers
• Enhancements for
predictive analytics in
process monitoring for decision support
• Improvements in
goods receipt process and usability through
posting of goods
receipts without reference
• Process enablement
for further Catch Weight Management
(CWM) scenarios
• Reduced
supply and
inventory
planning cost
• Increasedinventory
accuracy
• Reduced days in
inventory
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Digital Logistics & Order Fulfillment Deep Dive
17PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 PlannedInnovations
BusinessBenefits
• Complexity in
valuating
inventories in
multiple
currencies and
for different
valuation
methods (legal/
profit
center/reportin
g purposes)
• Material ledger activation
available along with
functionality of actual
costing. However,
inventory valuation data
exists in multiple
aggregated tables, which
leads to slow processes
(actual costing,
redistribution/
revaluation) and
slow/inefficient reporting
• Material ledger
available as a default
option. All inventory
valuation data exists
in material ledger,
removing
redundancies and
aggregates
• Faster actual costing
due to optimizedcode
based on SAP HANA;
faster reporting as
needed for actual
costing; multiple
currency and multiple
valuationmethods
• Increased
inventory
accuracy
• Increased visibility in actual profitability, allowing for margin optimization
• Limited
inventory
visibility,
increasing error
rate, and supply
shortages
• Inventory analysis is
possible through a
separate analytical
system with data
integration issues and
data latency
• SAP Fiori apps for
inventory managers
and warehouse clerks
• Optimization of inventory and material flows with analytical apps, to include inventory turnover analysis and flow analysis
• Inventory KPI analysis with follow-up actions on slow- moving materials
• New analytical apps for
warehouse clerks and
inventory managers
• Overview page to
support the inventory
analyst in daily
business by presenting
selected and relevant
KPIs and charts at a
glance
• Increased
inventory
accuracy
• Reduced supply
and inventory
planning cost
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
(continued next page)
Digital Logistics & Order Fulfillment Deep Dive
18PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 Planned Innovations
BusinessBenefits
• Managing
increasingly
complex, multi
modal, global
transportation
needs in a single
platform
• Manual
transportation
process taking
place in
disparate
systems with
inefficient
business partner
collaboration
• Lack of end to
end visibility with
electronic track
and trace
capabilities
• No holistic
optimization of
inbound,
outbound and
intracompany
freight
• Limited optimization
possibilities
- No planning combining
inbound and outbound
movements
- Planning based on
deliveries
- No transportation
capacity planning
• No comprehensive freight
agreement management
and settlement
capabilities with
customers and suppliers
• Limited tendering
capabilities
• No out of the box event
tracking capabilities
• Single platform for
transportation
management with
basic and advanced
shipping functionality
and real-time
embedded analytics.
This is enabled by SAP
Transportation
Management (TM)
embedded in the
SAP S/4HANA core
• Transportation
solution covering end
to end processes -
capacity
management,
planning, collaboration
execution,
transportation charge
management and
settlement in one
system
• Address requirements
of multiple industries
and modes
• Accurate
transportation costing
for improved invoice
accuracy
• The SAP Transportation
Management (SAP TM)
deployed as a stand-
alone application for
complex transportation
requirements
• Insights into
transportation
execution, timely
execution of critical
business processes
and tracking goods and
assets in transit
(SAP Global track and
Trace)
• Collect, map, store,
and analyze vehicle and
sensor data in real
time, optimizing
logistics and improving
services
(SAP Vehicle Insights)
• Advanced driver
planning
• Integration to
global track and
trace
• Estimated Time
of Arrival (ETA)
calculation
based on actual
data
• Collaboration
through logistics
business
network
• Migration tools
for SAP TM to
SAP S/4HANA
for TM
• Reduced total
logistics cost
• Reduced
transportation
management costs
• Increased inventory
accuracy
• Reduced order
fulfillment lead time
• Reduced TCO
through landscape
simplification
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Digital Logistics & Order Fulfillment Deep Dive
(continued next page)
19PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
TYPICAL PAIN POINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 Planned Innovations
BusinessBenefits
• Logistics processes done in disparate systems without comprehensive integration into core business processes
• IT complexity with
the need to build
multiple interfaces
• Analytics and
reporting done in a
separate business
warehousing system
with no real time data
update
• Lack of visibility and
automation in yard
management
processes leading to
inefficiencies
• Limited transparency
in multi tiered global
supply chain
network, with
multiple business
partners
• Embedded Logistics
Execution –
Warehouse Management (LE-
WM) and Logistics
Execution –Transportation
management (LE-
TRA) components only offer limited
functionality with
need to setup multiple Interfaces
with business suite
applications
• Reporting based on
Business Warehousing (BW)
content using
Business Intelligence (BI) reporting tools
with time lag from
transaction system
• Visibility into the location
and condition of goods
and assets along the supply chain
• Process transparency and collaboration with
the partners to identify
and address issues with in-transit tracking
• Valuable insights to make focused decisions to
lower costs and optimize
inventory levels
• Enable collaboration with
logistics partners to improve
throughput, reduce wait times, and increase
efficiencies (SAP Global Track
and Trace)
• Full visibility into the lifecycle
of serialized products and tracking products across
multiple systems (SAP Global
Track and Trace)
• Efficient management of yard
activities such as managing stock, locations and vehicles
(SAP Yard Logistics)
• Collect, map, store, and
analyze vehicle and sensor
data in real time, optimizing logistics and improving
services ( SAP Vehicle
Insights)
• Unplanned
returns process
triggered from SAP Extended
Warehouse
Management (EWM)
• Analytics for
delivery performance
• Intuitive forward
navigation in order to achieve
routine and
exceptional task
• Improve on-time
delivery
performance
• Reduce days in
inventory
• Improve customer satisfaction
• Reduce total
logistics cost
• Reduce operations
cost (Services)
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
(continued next page)
Digital Logistics & Order Fulfillment Deep Dive
20PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
TYPICAL PAINPOINTS
Current State with ERP on Traditional Database
SAP S/4HANA Capabilities
Cloud/ LoB and SAP Leonardo Solution
Capabilities
2018 Planned Innovations
BusinessBenefits
• Inability to
promise
accurate and reliable order
dates leads to
customer dissatisfaction
and revenue
loss
• Inefficient
strategies or
manual processes to
manage orders
and allocations lead to revenue
loss and
fulfillment issues
• Inability to
select alternative
sources
intelligently impacts
profitability
targets
• Global ATP checks in a
different planning
system
• Low-volume back-
order processing
supported
• Mass product availability
check for sales, planned
and production orders. Advanced ATP check
and performance
improvements for releasing large
production orders
• Multichannel allocation management using
demand characteristics
to allocate and reserve short supply. Real-time
order confirmation
considering allocation constraints
• Back-order processing
with intuitive selection and ranking of demand
to establish order
priorities. Rescheduling order confirmations
interactively to manage
variability through out the day
• Improved user
productivity with SAP Fiori apps including:
back-order processing
setup and result monitor and last-minute changes
before release for
delivery
• Response planning
capability for midterm
allocation planning and short-term order
confirmation in order to
automate allocation procedures , take effective
corrective action and
respond rapidly (SAP Integrated Business
Planning)
• Display and analyze
confirmation situation
of requirements and product allocation
availability situation
• Trigger an alternate backorder processing
run automatically when
an exception occurs
• Alternative-based
confirmation:
automatically determine the best
possible plant to fulfill a
requirement
• Reduction in
revenue loss due
to fulfillmentissues
• Reduction in
cancellations of back-ordered
items
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Digital Logistics & Order Fulfillment Deep Dive
Local Manufacturing
Networked Economy Changing Society
21PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Customer Experience
21
The new economy is the networked economy. Organizations are
seeking cross department and cross industry business network
collaboration. Also, visibility down multiple levels of a supply
chain is needed for sustainable and socially responsible
networks.
An increasing percentage of the world’s population now lives in
cities and urban areas. This increases the pressure on infrastructures
such as electricity, water, and power grids and thus the need to
optimize space and logistics. Also, as manufacturing becomes more
automated, the role of employees and the skills required are also
evolving.SAP Integrated Business Planning and SAP Ariba solutions
provide collaboration across supply chain, logistics, assets, and
manufacturing. IoT solutions from SAP leverage data from smart
assets to drive data and business processes. Also, improved
collaboration in design results in improved compliance and
sustainable products.
IoT solutions from SAP help build smart cities and optimize the rural
areas to support the ever-growing population with the ever-decreasing
natural resources. SAP Leonardo capabilities help data scientists
analyze vast amounts of data and provide innovative solutions in this
time of changing work environments and populations.
Digital Priorities in Supply ChainMajor shifts in the economy are accelerating the transformation to a Digital Supply Chain. These evolved supply chains are more connected, intelligent,
responsive, and predictive. Below are few digital priorities that will help companies to capture the opportunities and remain competitive.
Customer expectations are changing and individualized products
are becoming commonplace. It’s not about selling the product
but caring about the customer from the beginning through the
entire lifecycle. Ability to deliver the same day, or even the same
hour to different types of locations is the key to a great customer
experience.
Companies are moving “closer to home” and reducing outsourced
manufacturing with the preference of local manufacturing. To make
manufacturing processes more efficient and affordable there is an
increase in automation and robotics on the production floor. Also,
the assets and products are becoming more connected and smarter.
SAP S/4HANA supports agile manufacturing with ‘lot size of one’
and 3D Printing customization capabilities, which reduces
inventory carrying costs. SAP solutions provide better visibility into
the performance of the shop floor equipment to increase uptime
and utilization.
SAP Connected Goods software captures information from smart
products using IoT sensors. SAP S/4HANA supports the new
consumption-based business models, leading to increased
revenue for the organization.
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
22PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
• Run Simple (master complexity): adapt to market
opportunities and develop newchannels
• Integrate planning and execution across strategic,
tactical, and operational time horizons
SAP’s Value Proposition for Supply Chain
Business Benefits
Risk Management
Employee Engagement
STRATEGYENABLEMENT
RISK MANAGEMENT
BUSINESS BENEFITS*
EMPLOYEE ENGAGEMENT
• Plan risk as part of a structured,
collaborative, integrated business
planning process
• Accelerate planning and response cycle times, moving from
monthly, to weekly, to daily decision processes
• Adopt short-term demand sensing and supply
replanning to respond to variability
• 12–15% reduction in days of inventory
• 10–15% reduction in revenue
loss due to stock-outs
• 10–15% reduction in total logistics cost
5–10% reduction in supply chain planning
cost
Reduction in order fulfillment lead time
• Enhances supply chain planning productivity
through easy-to-use Microsoft Excel and
analytics-based planning interface
• Helps production and material planners execute
critical daily tasks with embedded decision
support analytics and the role-based SAP Fiori
user experience
• Increases throughput
*Benefits are based on early adopters of SAP or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA, Cloud/ LoB
applicationsand SAP Leonardo solutions. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value
proposition for your enterprise.
StrategyEnablement
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
23PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Customers are Achieving Value from SAP
PRESTIGE BRANDS HOLDINGS Inc.
• Decreased time for report generation from 2 days to minutes
• Reduced time for sales quota planning from 4 weeks to 3 hours
• Achieved greater acceptance, trust, and compliance across all
organizational units
Prestige Brands focuses on product innovation in the over-the-
counter healthcare and household products, It implemented
SAP Integrated Business Planning Solution to support account
planning. The centralized tool provided what-if scenario analysis
to evaluate different plans with visibility into immediate impact
on customer service and working capital investments
LOHIYA GROUP
• 100% Visibility of inventory across all locations
• 70% Less time spent on decision making
• 60% Faster transaction processing time
Lohiya Group offers a range of products for consumption for the
domestic and commercial sectors throughout India. It
implemented SAP S/4HANA to automate freight determination
based on customer region from point of delivery, as well as to
track orders and pricing. The company also expects to eliminate
the need for reconciliation between warehouse and accounts,
thanks to fully integrated inventory and accounting transactions.
Company
Prestige Brands Holdings Inc.
Industry
Consumer Products
SAP Solution
SAP Integrated Business Planning
CustomerWeb Site
www.prestigebrands.com
Click here for Prestige Brands Holding Inc. source reference
Click here for Lohiya Group source reference
Company
Lohiya Group
Industry
Consumer Products
SAP Solution
SAP S/4HANA
CustomerWeb Site
www.lohiyagroup.in
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
24PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
FARMA-TEK
• 3-day Order fulfillment, down from 8 days
• 40% Reduction of capital tied up in stock
• 40% Reduction in waste due to FEFO (First Expired-First Out)
methodology
Farma-Tek, a pharmaceutical company based in
Istabnul, aspires to introduce new products to
healthcare professionals. SAP S/4HANA runs all of the
company’s business processes on a single platform.
Real-time insight suppots Farma-Tek in predicting the
flow of materials to produce the right products at the
right time. It also assists the company in regulatory
compliance tracking – an imperative in this industry
GULFTAINER COMPANY LIMITED
• Improved operational efficiency
• Agile solution to support enterprise mobility and on-the-go business
• Scalable foundation to support future growth
Gulftainer is a privately owned, independent port management and 3PL logistics company based in United Arab Emirates (UAE). SAP S/4HANA is expected to enable a more efficient, cost-effective movement of international business through their terminals, providing the actionable data necessary to increase productivity and reduce costs
Click here for Farma-tek source reference
Company
Farma-tek
Industry
Pharmaceutical
SAP Solution
SAP S/4HANA
CustomerWeb Site
www.farma-tek.com
Click here for Gulftainer source reference
Company
Gulftainer
Industry
Travel and transportation
SAP Solution
SAP S/4HANA
CustomerWeb site
www.gulftainer.com
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Customers are Achieving Value from SAP
25PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Customer Engagement Methodology
No matter which path applies to your enterprise, SAP has a structured four-
phase approach to ensure success – executive alignment, value discovery,
validation and executive readiness, and value delivery.
For more details, please see the brochure:
Driving Value in a Digital Economy
SAP Value Assurance Service Packages
Take advantage of SAP Value Assurance service packages for SAP
S/4HANA to quickly and safely harness the power of next-generation
software and in-memory processing.
For all value assurance packages and for the successful and seamless
transition to SAP S/4HANA, please visit the link:
Transition to SAP S/4HANA.
SAP S/4HANA Road Map
With a three-year detailed road map, SAP gives customers the transparency
to accelerate their transition to an SAP S/4HANA landscape.
SAP S/4HANA Road Map.
Start Today with a Trial SAP S/4HANA Trials
Key Assets for Next Steps on SAP S/4HANAwww.sap.com/s4next
Innovate with SAP Leonardo
SAP Leonardo is SAP’s digital innovation system that makes it easy to
innovate with new technologies, integrate them into your business, and
scale seamlessly as your company grows.Get started today with SAP Leonardo
Explore SAP Leonardo capabilities
Learn more about SAP Leonardo capabilities – and see how customers in a
variety of industries are using the system to realize the promise of new
technologies, such as the IoT and Big Data analytics.
For more details, please see the e-book:
Leonardo customer stories
Get an Expert Take on Digital Transformation
What are the benefits of blockchain, machine learning, and other
transformational technologies – and how are they impacting business?Get answers from experts and analysts in this e-book
Your Path to Digital TransformationEvery enterprise is unique, with different starting points and end points. Whether you are starting as a net-new implementation or undergoing a digital transformation in
an existing SAP landscape, SAP can help. We have been working with enterprises of all sizes and ¡n all industries. Based on the depth of this experience, SAP has a
robust portfolio of services
Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Assess Your Supply Chain Digital Maturity
Want to understand your Supply Chain digital maturity?Click here to participate and see how you compare to peers in real time.
Lay the Foundation for an In-depth Digital Transformation Engagement
Get clear guidance on SAP S/4HANA centric product map through a free self-service for customers and partners.www.sap.com/TransformationNavigator
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