From Supply Chains to Demand Networks SAP’s · PDF fileFrom Supply Chains to Demand...

From Supply Chains to Demand Networks – SAP’s

Supply Chain Strategy and Roadmap

This presentation 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, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

Patrick Crampton-Thomas

VP SAP Supply Chain Solution Management

October, 2014

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 2

The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the

permission of SAP. This presentation is not subject to your license agreement or any other service or subscription

agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related

presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation

and SAP's strategy and possible future developments, products and or platforms directions and functionality are all

subject to change and may be changed by SAP at any time for any reason without notice. The information in this

document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This

document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied

warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational

purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this

document, except if such damages were caused by SAP´s willful misconduct or gross negligence.

All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ

materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,

which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

Legal disclaimer


Supply Chain Needs to Adopt to New Business Realities New methods are required to respond as global supply chains are transforming

into demand networks

Volatile Markets The customer has more knowledge about products and

services than ever before (e.g. Social Networks)

Growing Logistics Complexity The customer expects flexible and speedy delivery of ordered

products (e.g. delivery within the next hour)

Innovative Manufacturing Technologies The customer is demanding individualized products (e.g. print

your food with 3D Printers)

SPEED

SPEED

© 2014 SAP AG. All rights reserved. 4 Internal

Are Supply Chain Organizations Prepared for Demand Networks? Major Challenges for Supply Chain Professionals

Orchestrate the Global Network of Partners Less than ~10% of suppliers are directly connected to their customer’s supply chain

Execute the Supply Chain efficiently About 10% of world-wide GDP is related to logistics spending

Improve Short-Term Planning Results Forecast accuracy for the first week is in average lower than 70%

Manage the Supply Chain in Real Time Only 20% of Supply Chain Professionals have information available within a day


Supply chains are evolving into product and demand networks

that drive six core processes across the enterprise

Product & Demand Networks Operate

Deliver Produce

Design

Respond

Plan

© 2014 SAP AG. All rights reserved. 6 Internal

SAP Supply Chain Solution Strategy Enable Businesses to Transform their Supply Chains to Demand Networks

Powered by SAP HANA

[THE DEMAND NETWORK]

Response and Supply Orchestration Manage Customer response and orchestrate the supply NETWORK

Logistics & Order Fulfillment The DEMAND NETWORK requires speed & efficiency in Logistics

Demand Driven Business planning Sense & shape DEMAND. Balance DEMAND plans with

NETWORK constraints for profitability

Supply Chain Monitoring Ensure integrity and predict issues of the DEMAND NETWORK


ma

na

ge

d

clo

ud

public cloud

on-premise

SAP Business Suite

Mobile First Experience

planning network

monitoring

logistics

SAP HANA Platform

SAP Supply Chain Architecture Sketch Simplified and Harmonized Solution Architecture for Demand Networks


SAP Integrated Business Planning Speeding up the Supply Chain requires a new Supply Chain Planning approach

One Harmonized Data Model Avoid any latency due to integration efforts and leverage the

SAP ERP data model

Cloud First Approach The solutions will be provided in the SAP Cloud but also be

made available on-premise

Mobile First Experience Introduce state-of-the art user experience with communication

capabilities (SAP JAM) and MS Excel Spreadsheets

Built on SAP HANA Demand Networks require real-time monitoring and a focus

on short-term planning

New Planning Algorithm Leverage predictive analytics (e.g. demand sensing)

algorithm in combination with optimization


SAP Business Network

Supply Inventory Response Demand

Sales & Operations Planning


Supply Chain Control Tower

SAP HANA Platform


Im

Example innovations and roadmap

Market and Consumer

Insight with Demand Signal

Management.

Collaborative Demand

Planning for both simple and

advanced use cases

‘Demand Sensing’ based on

inventory, POS, order feeds

for short term and daily

forecasting and exception

management






SAP HANA Platform


SAP Integrated Business Planning for sales and operations


Deliver a cross departmental sales and

operations plan balancing the impact on

inventory, service levels and profitability

• Create the optimal business plan to drive

revenue growth and increase market share

• Effectively balance demand and supply and

attain financial targets

• Increase speed and agility of planning and drive

most profitable responses

• Improve forecast accuracy and on-time delivery

through aligned and integrated Business

Planning across short, mid and long term

Demand Inventory Supply

Response

Sales and Operations



Where does SAP Integrated Business Planning for sales and

operations fit across enterprise planning?

Strategic

Planning

Sales and

Marketing

Operational

Planning

Opportunities,

Promotions

Constrained Qty

Plan Short Term

Plans

Scenario Plans

Constrained Revenue Margin

Projections

Strategic Plans

Sales

Forecast

Financial

Planning

Scenario Plans

Constrained Revenue

and Margin Projections

Strategic

Tactical/Execution AOP, Finance Plan

SAP Sales and Operations

Planning on HANA


R&D


SAP Integrated Business Planning for sales and operations

sample use cases S&OP process management Simulation

Collaboration Dashboard analytics



Key features of SAP Integrated Business Planning for sales

and operations

Social collaboration

Transparent communication,

record decisions

Real-time what-if

scenario planning

Real-time scenarios and

simulation on entire model

Complete scalable

model

Demand, supply chain, and

financial model at aggregate

and detailed levels

Supply

Finance Demand



Im







SAP HANA Platform

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 20 This presentation 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, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

How about here? Here? How much inventory here?

Why are we holding Inventory?

Managing complex Inventory decisions


Integrated Business Planning for inventory benefits

Achieving the right balance between inventory

and service levels

-60%

-40%

-20%

0%

20%

40%

60%

Incre

ase

D

ecre

ase

Fix the mix of inventory for each item at each

location

90% 92% 94% 96% 98% 100%

Inve

nto

ry (

$)

Customer Service Level (%)

Optimal inventory Company current performance



Im

IBP Solutions integrated with S&OP – Released July 2014

End to End Visibility across

the supply chain for

Performance Management,

Operational Reporting and

Simulation

SCM Event Management,

Serialisation of products and

full Batch Management and

Traceability






SAP HANA Platform


SAP Supply Chain Control Tower


Enable supply chain professionals to

navigate, analyze and profitably manage the

end-to-end supply chain in real-time

• Increase end-to-end visibility

• Increase on-time delivery performance to

customer

• Decrease overall inventory levels while

reducing risk

• Increase supply chain agility and reduce supply

chain cost

SAP Business Suite


planning network

monitoring

logistics

SAP HANA Platform


SAP Supply Chain Control Tower sample use cases

KPI Library & Dashboards Global visibility & Analytics

Collaboration with Task & Case management


Alerting to Action

Demo

link


Key enablers of SAP Supply Chain Control Tower


End-to-end monitoring

Comprehensive view of supply chain

current and historical supply chain

performance

Alerts

Quickly identify current and future

potential supply chain problems

Collaboration

Communicate and resolve issues across

functions


Im


Market and Consumer

Insight with Demand Signal

Management.

Collaborative Demand

Planning for both simple and

advanced use cases

‘Demand Sensing’ based on

inventory, POS, order feeds

for short term and daily

forecasting and exception

management






SAP HANA Platform


SAP Integrated Business Planning for demand


Gain full demand transparency for short-, mid-

and long-term forecasting by leveraging demand

sensing and statistical forecasting methods

• Develop more accurate mid-term statistical

forecasts

• React faster to short term demand changes with

pattern recognition based algorithms to

• Better integrate short term demand planning and

execution

• Respond to demand changes

• Drive more accurate deployment of product

• Collaborate to ensure the most accurate forecast

and manage exceptions

PLANNED


IBP-Demand including SAP Enterprise Demand Sensing Sense Short-Term Demand Patterns

Short-term Forecast Issues Increase

Inventory and Reduce Service Metrics Enterprise Demand Sensing – Increase short

term accuracy including daily patterns

Predict daily demand requirements

Apply pattern-based forecasting logic for

shipment and fulfillment

Sense downstream demand using external

data patterns (Planned Innovation)

AVAILABLE (IBP Release 2014)

Forecast patterns

Shipment patterns

Open order patterns

Open order

correction

Predicted future

bias correction


Im


Existing mature and sophisticated supply planning

capabilities within SAP APO

Improved Usability

Order based network planning and production

planning

Available for HEC deployment or On Premise

New Supply planning Capabilities developed as

native HANA applications

Available: IBP-Supply Rough Cut supply

planning (working in conjunction with IBP-

S&OP time series framework)

Planned: New IBP Response and IBP Supply

solutions for advanced order based supply

planning across networks






SAP HANA Platform


SAP Integrated Business Planning for Response & Supply: Order

Based Operational Planning


Fast, rules-based, demand priority driven supply

planning, allocations planning, and order rescheduling

• Planning & what-if simulation of forecast and order demand

• Order / demand-based prioritisation rules

• Infinite or Finite (priority rules-driven) planning across

supply / manufacturing network for all materials and

resources

• Full pegging and gating-factor analysis

• Generate and provide allocations to ATP for online

confirmations of sales orders

Capable-

to-Match

Backorder

Processing

PLANNED



Combine the best of SAP’s

existing Supply Network

Collaboration Solution with

the network capabilities of

ARIBA’s Business Network

Enable collaborative supply

chain process with both

customers and suppliers

Options for On Premise and

Cloud deployments






SAP HANA Platform


SAP Announces availability of Supply Chain Orchestration

Combine the best of SAP’s

existing Supply Network

Collaboration Solution with

the network capabilities of

ARIBA’s Business Network

Enable collaborative supply

chain process with both

customers and suppliers

Support for all collaboration

partners from simple order

collaboration to advanced

supply chain scenarios with

strategic partners


Enabling the Best Business Network

SAP Information Interchange

Content Engine

Item

Locatio

n

Party

Business

Partner Profiles

SNC Integrated collaboration

with advanced and broad

Supply Chain Business

processes

Ease of deployment, connectivity and

onboarding

SAP B2B Supply Chain

Connectivity (ex-

Crossgate Solutions)

Supply Chain Orchestration (SCO)

Communication &

Collaboration


Accelerated Supplier Onboarding with Ariba Network: On-

Boarding Services, Self-Registration & Unified Supplier Portal

Supplier Self Registration

Logon to Supplier Portal

Ariba Network ~1 million trading partners

across all industries

40+ million Purchase Orders

60+ million Invoices

~$400 billion in spend

142 countries

72 currencies

40 Invoice compliant countries


Integrated Business Planning, Monitoring & Network Available and Planned Products

Ma

na

ged

clo

ud

(H

EC

)

Public cloud

On-premise (future)

Mobile-Enabled User Experience

IBP for demand IBP for supply


IBP for

sales and operations

IBP for response

SAP HANA Platform

IBP for inventory

Supply Chain Control Tower AVAILABLE

AVAILABLE

AVAILABLE AVAILABLE PLANNED

PLANNED


Integrated Business Planning (IBP)

AVAILABLE


SAP APO Has Been Significantly Enhanced Recently


• SAP APO available on

SAP HANA and HANA

Enterprise Cloud (HEC)

• LiveCache is part of

SAP HANA

• Performance

improvements for many

transactions and

planning runs

• SAP Supply Chain

InfoCenter enables

real-time analytics of

APO data

• Direct access of

LiveCache data with

easy navigation

between SAP APO and

SAP SCIC

• Renovation of Product

View, eBOPI, and

Planner’s Home Page

• Introduction of Fiori

Applications for GATP

Analytics

• MS Excel Add-In for

APO Demand Planning

Performance Analytics Usability

Demand Planning

Supply Network Planning

SAP APO

PP/DS

gA

TP

any

Database

HANA

SAP Supply

Chain Info Center

SAP Enterprise Inventory and

Service Level Optimization SAP Supply Network Collaboration


Manufacturing Planning & Scheduling – SAP APO PPDS


Generate a short- to midterm supply plan /

machine schedule based on orders, WIP,

detailed Material flow definitions

• Support for finite backward- and forward-scheduling

models with constraint-modeling capabilities

• Creates a production schedule considering all capacity

constraints (at multiple levels) and materials availability

• Optimization based on actual constraints to ensure

reliable delivery-due-date promises and to maximize

capacity utilization

• Highly specific sequencing capability (for example, tank

mixing and scheduling, model mix planning &

sequencing)

• Seamlessly integrates with ATP for CTP scenarios

AVAILABLE (HANA Simplification planned 2015)

B-20 C-20 Resource 2

(Finite)

Resource 1

(Infinite)

A-20 D-20

C -10

D-10 B-10

A-10


Incorporate SAP Integrated Business Planning in phases by

adding incremental value to existing planning solutions


User Experience

IBP for demand IBP for supply

IBP for

sales and operations

IBP for response

SAP HANA Platform

IBP for inventory


Integrated Business Planning (IBP)

Supply Chain Monitoring

Demand Planning

Supply Network Planning

SAP APO

PP/DS

gA

TP

any

Database

HANA

SAP Supply

Chain Info

Center

SAP Enterprise

Inventory

and

Service Level

Optimization

SAP Supply

Network

Collaboration

+

Flexible roadmap for short, mid and long

term value delivery:

1) Continue APO Roadmap in line with business needs

and value delivery, fully supported by SAP through

2025

2) Extend existing SCM footprint with value-add elements

of IBP and lay the foundation for next generation real

time supply chain. For example SAP Integrated

Business Planning (IBP) for sales and operations, IBP-

inventory and supply chain control tower can be used

with SAP APO, SNC or EIS

3) Further adopt SAP Integrated Business Planning

elements such as IBP for demand and IBP for

response when available


World class solution for supply chain monitoring, sales and operations planning, demand

management, inventory planning, supply planning, and response management

SAP Supply Chain Platform for Demand Networks

ma

na

ge

d

clo

ud

public cloud

on-premise

SAP Business Suite


planning network

monitoring

logistics

SAP HANA Platform

Contact information:

Patrick Crampton-Thomas

Vice President, Supply Chain Solution Management [email protected]


© 2014 SAP SE or an SAP affiliate company. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an

SAP affiliate company.

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(or an SAP affiliate company) in Germany and other countries. Please see http://global12.sap.com/corporate-en/legal/copyright/index.epx for additional trademark

information and notices.

Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors.

National product specifications may vary.

These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its

affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or

SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing

herein should be construed as constituting an additional warranty.

In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or

release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future

developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for

any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-

looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place

undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

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