Proprietary and Confidential

Improving ROI in SAP supply chain solutions

New possibilities & processes

- 2 -

Demands from Complex Global Supply Chain on solutions

Need Supply chain solutions

Flexible to support new business scenarios

Provide Integrated Planning & execution capability

Leverage partner data for network optimization

Integrated reporting and simulation tools

Challenges Drivers

• Perfect Order fulfillment and Cash-to-Cash

efficiency needs

• Inventory Reduction Targets

• Complex networks

• Supply chain visibility & network collaboration

issues

• More demanding customers

• Global sourcing

• Risk & compliance

• End-to-end integration needs

• Demand variability

• Consolidation & convergence

- 3 -

Traditional Use of SAP SCM Solution

• Highly integrated MPS, DRP engine could be connected to multiple SAP ERP instances world wide

• Capability to support constrained and un-constrained planning processes

• Integrated deployment and truck load optimization features

• Global Supply Planning

Engine

• Numerous non standard demand planning process within organization could be replaced with one

uniform SAP demand planning solution

• Great capability to define custom key figures to enforce consensus forecasting process

• Scalable Demand

Planning platform

• Utilize order pegging , short term change over ,sequencing and simulation capability

• Advantage of integration with SAP ERP

• Simultaneous material & capacity planning

• Detailed production

Scheduling Solution

• Use for Multi –site , Multi- level available to promise check & confirm accurate delivery date

• Check alternate location, alternate material for real time fulfillment possibilities• Global Available-to

- Promise Tool

• Use to seamlessly share demand and purchase schedule with CMs and RM suppliers (all size)

• Use to obtain near real time visibility of stock levels at all locations of supply network• Business Partner

Collaboration

Customer

Supplier

CM

Manufacturer/

OEM

Retailer

Logistics

- 4 -

New Challenge – Supplier Downsizing & Demand Variability

4

ComponentSuppliers

& CMs

Manufacturing

Material Mgmt

HQ

SalesOps

Poor Orchestration Across Extended Supply Chain

Implications Long lead times impact

exposure Inventory still being

purchased when my demands drop

High risk suppliers potentially driving greatest exposure

Implications Inventory held at different tiers and not

on your balance sheet Increasing shift of procurement

responsibilities to partners Components used across multiple

products and regions

Complete Picture of Risk Not AvailableConsequences of Demand Shifts Not Identified

Implications Difficult to see effects on all

inventory costs No visibility to alternatives Looking only at today not the

impact on tomorrow

Varying Contract Terms Drive Potential Liability

Implications Hard to calculate liabilities Contracts disconnected from

inventories Increasing numbers of suppliers

increases complexity

SC operations

1

2

3

4

- 5 -

New Possibility – Understand supplier risk and inventory liability using SNC

EC

C

GU

I

Inventory Risk and Liability Management Dashboard

Forecasts Shipments Inventory

SAP SNC

Supply Network InventorySAP ECC

Where-usedPrices

Utilize inventory, forecast and shipments data applicable to supplier location from SNC SNI application.

Source prices and component “where-used” information

(BOM) from ECC

- 6 -

New Challenge – Increased supplier dependency on fulfillment decisions

6

Extended Supply Chains

Implications

Longer lead times

Coordinate across

continents

Supplier networks may

not be able to ramp up

instantaneously to

changing Demand

Pin point exact root

cause for fulfillment

issues not easy

Demand could ramp up and ramp down anytime

Implications

Difficult to see to what

extent Customer Demand

can be fulfilled

Not sure of which critical

component need urgent

attention

Not sure of weak elements

in supply chain

Extending supply chains aimed at reducing costs increased supplier /CM dependency & their capability to

match demand swings

- 7 -

New Possibility – Integrate APO & SNC to check clear-to-build

GU

I

Clear-to-Build Dashboard

Component stock at CM location

SAP SNC

Supply Network Inventory

Use stock data of critical components at Contract Manufacturer location

Run material constraint planning check with APO SNP-CTM using CM data sourced from SNC

Planning Results

SAP APO

Capable-to-Match Supply Planning

- 8 -

New Possibility – Global Available to promise with SNC & APO

Use stock data of critical components at Contract Manufacturer location

APO gATP check includes CM data sourced from SNC

GATP Results

SAP APO

Global-Available-to-Promise

Stock at CM location

SAP SNC

Supply Network Inventory

Sit

uati

on

Typical Assembly BOM constitute of critical components and non critical

components

Complete demand and supply visibility of critical components through OEM’s

ERP /SCM

No accurate visibility of projected stock of non critical components at CM

location

No systemic mechanism to project potential sub- assembly stock outs due to

unavailability of non critical parts

No visibility of excess stock of non critical parts carried by CM on behalf of

OEM

- 9 -

New Challenge – Perfect order fulfillment with retailer with ever increasing

SKU complexity

External Data

Sources

ERP & CRM

Enterprise Performance

Management

Mfg DC

Internet

VPN WAN

Store 1

Store 2

Store n

Back Office

SystemsStore

Analytics

Point of Sale

Merchandise

Management

Campaign

Management

& CRM Customers

Web Store

Payments

Financial

Reconciliation

Loyalty &

Coupons

Gift Cards

Mobile

Supply and Demand

Planning

Analytics

Workforce

Management

Retailer

DC

Loss Prevention

RFID

- 10 -

New Possibility – Extend APO DP to obtain retail replenishment visibility

Reta

il A

naly

tic

s

Process historic point of sales information & use DP macros to

Collect manufacturing capacity globally using

planning book

Use historical POS to project future POS

Control POS projection for promotions using

custom algorithms with configurable

parameters

Plan shipments from 3rd party manufacturing vendors to retail customers

Plan future inventory procurement based on shipment plan to support the projected

marketplace needs

Calculate Shipment projections

Interactive selection and customizing of

forecast generating algorithms

Interactive Custom screens/reports from

Demand Planning GridECC

BWCu

sto

me

r

(stock on hand, in transit,

POS, stock out)

Order

Proposal

Order

Confirmation

Master Data

SAP APO

DP

Material Determination

Net Price

SAP

- 11 -

New Possibility – Extend APO DP to obtain retail replenishment visibility

- 12 -

New Challenge –Distributed Manufacturing and integrated planning

Implications Very little reaction time to adjust to

change of plans Unable to convey constraints

Unable to provide interim update of production to OEM

Unable to convey dynamic changes in production & obtain real time inputs for MRP

Implications Difficult to see effects on change of

demand & supply Planning systems work in isolation

resulting in unrealistic plans Looking only at today not the impact on

tomorrow

Planning not synchronized between partners

Implications End customer Fulfillment

challenges Excess inventory & obsolescence Planning results unreliable

2

My Company

Component

Suppliers

Foundries

- 13 -

New Possibility – Integrate inputs from outsourced foundry using SNC

- 14 -

Get More from SAP SCM –Patni Expertise

Why Patni for SCM Solutions ?

Proof-of-Concept solutions for many

business scenarios available in Patni

Sandbox

Total Risk Free Approach – Option to

undertake detailed value assessment

workshop to confirm ROI

Proven ROI - Proven short time frame

for Return on Investment (ROI) for

many enhancements in SAP SCM

Benefit from our learning curve –

Experience working with various

customer situations & business models

SAP Relationship– Support of SAP in SCM

projects

Patni: The Value of Experience

– Global SCM implementation expertise and ready-made

benefit assessment tools

– Speed-to-value-approachTM using blue print and build

accelerators to reduce time to go live

– Deep application expertise as part of product development

testing partnership.

1. Expert Thought

share

3. Value Deployment

Program

2.Establish Business

Case

- 15 -

thank you!