SAP Value Proposition for Discrete...

SAP Value Proposition for Discrete ManufacturingLeveraging Key Trends for Competitive Advantage

Pete BusseySAP High Tech Industry Team

SAP AG 2003, Title of Presentation, Presenter 2

Agenda – Discrete Manufacturing Session

1:00 pm SAP Value Proposition for Discrete Manufacturing Pete Bussey, SAP

1:30 pm BreconRidge: A Case Study in Growth Jeff Paddison, CIO, BreconRidge

2:30 pm Customer Panel: Competitive Advantage with SAP

Junior Ali VP Supply Chain, Sony of CanadaJean Mathieu VP Client Services, ProgistixJeff Paddison CIO, BreconRidge

3:30 pm Closing Remarks Pete Bussey, SAP


Leveraging Trends for Competitive Advantage

Key Industry Trends

Leading Edge Solutions for Discrete Manufacturing

Key Take-Aways


Dynamic Market Forces are Driving Change

ComponentSuppliers

Contractors

OEMs

Distributors& Resellers

Increased Competition

Customized Solutions

Support / Retention

Time Pressures

Globalization

Customers Partners

Discrete ManufacturingIndustrial Mach. & ComponentsHigh TechA&D

Accelerated Quoting

Shorter Product

Life-Cycles

Outsourced manufacturing

and fragmented inventory

DistributedProduct Design

Multiple Sales and supportchannels

Reducedtime-to-market


Hyper-competition Demands Connected Processes

• Enhance customer satisfaction & win rate

• Improve forecast accuracy• Enable revenue growth Customer Intimacy &

Solution Integration

Today’s Web-enabledCompetitive Space

Traditional Competitive Spaces

• Enhance engineering productivity

• Reduce time to market• Better leverage existing

IP

• Improve delivery performance

• Optimize inventory• Improve ROA

Operational Excellence

(Price/Value)Product Innovation


Outsourcing Demands Supply Chain Collaboration


Discrete Winners Require Segment SpecificSolutions

1985

DistributorDistributorDistributor

DistributorDistributorDistributor

SemiconductorManufacturerSemiconductorSemiconductorManufacturerManufacturer

Capital Equipment

Manufacturer

Capital Capital EquipmentEquipment

ManufacturerManufacturer

Indirect SupplierIndirect Indirect SupplierSupplier

Technology Reseller

Technology Technology ResellerReseller

ComponentManufacturer

ComponentComponentManufacturerManufacturer

Raw Material Supplier

Raw Material Raw Material SupplierSupplier

System OEMSystem OEMSystem OEM End User

2003Foundry Assembly

& TestEMS

Provider

One Size Does Not Fit All in Discrete !!

Service Provider

Fabless Design/

IP House

System Design House

Software Provider


SAP High Tech Customers: Leaders in Each Segment

Software: Microsoft, Synopsys, Autodesk, Cadence,

Capital Equip Manufacturers: Applied Materials, LAM Research, …

Subcontract Manufacturers: TSMC, UMC, OSE, ASE, …

Semiconductor: AMD, Motorola, IBM, National SemiconductorNEC, LSI Logic, Analog Devices, Micron, Toshiba, Texas Instruments, Philips, Adaptec, Fujitsu, Infineon, Lucent, Atmel, …

Fabless Semiconductor: nVIDIA, Sharp, Adaptec, Cirrus Logic, Conexant, Fujitsu Shinko, SMSC …

Distributors/Resellers: Avnet, Tech Data, EnPointe, …

EMS Providers: Jabil Circuit, Omni Venture, Celestica, …

Original Equipment Mfgs : HP/Compaq, IBM, Sony, Nokia, Ericsson, Hitachi, Siemens, Matushita, Toshiba,Alcatel, Samsung, …


IM&C Customers – a Selection


A&D Customers - a Selection



Key Industry Trends


Key Take-aways


Industry Solution Portfolio- High Tech

Enabling the High Tech Value ChainValue Chain Element: 1

Design

Value Chain Element: 2

Sell


Buy


Make


Move/Store


Service

Enterprise Management Strategic Enterprise Management Business Analytics Business Intelligence &

Decision Support AccountingEmployee Relationship

Management & Workforce Analytics

Sales, Marketing & Service Marketing Sales Service Analytics

Semiconductor & Component Manufacturing

Product & Process Technology

DevelopmentDesign Win Order Management

Collaborative Supply Chain

PlanningManufacturing Logistics Execution

Electronic Manufacturing Services

Product Data Management

Supply Chain Planning

Order Management

Component Procurement

Production/Assembly

Logistics Execution

Service Management

Original Equipment Design & Manufacturing


Supply Chain Planning

Component & Services

Procurement

Order Management

Contract & Inhouse

ManufacturingDistribution

IBaseManagement &

Upgrades

Software ProviderCustom

Development Specification

Software Development

Professional Services


Order Management Maintenance

License & Installed Base Management

Value Added Distribution & Resale

Product Management

Collaborative Planning Sourcing Sales/Mass

Customizing

Solution Kitting, Assembly & Integration

Distribution Installed Base Management

Business SupportEmployee Life-

Cycle & Transaction Management

ProcurementFinancial Supply

Chain Management

Fixed Asset Management

Incentive & Commission Management

Foreign Trade/Legal

Services

RosettaNetSupport


Industry Solution Portfolio-Industrial Machinery & Components

Enabling the IM&C Value ChainValue Chain Element: 1

Design


Sell


Buy


Make


Move/Store


Service

Enterprise Management Strategic Enterprise Management Business Analytics Business Intelligence &

Decision Support AccountingEmployee Relationship


Marketing, Sales & Service Market Research & Analysis Product & Service Marketing Sales Cycle Management Installation & Start Up Service

Product Research & Development

Program & Project Management

Design, Concept & Specification

Engineering, Prototyping & Product Development

Life-Cycle Data Management

Change & Configuration Management

Make-To-Stock Product Demand Planning Production Planning & Scheduling

Production & Procurement Execution

Order Processing, Shipping & Billing

Make-To-Order Component Demand Planning

Configuration & Sales Cycle Management

Production Planning & Scheduling

Production & Procurement Execution

Shipping, Assembly & Order Billing

Engineer-To-Order Concept & Product Development Sales Cycle Management Project Planning &

EngineeringProject driven Production

& ProcurementShipping, Assembly &

Project Billing

After Market Sales & Service

Installed Base & Contract Management

Customer Interaction Management & eService

Service Order Processing

Service Parts Management Warranty Service Analytics

Business Support Procurement Inventory Management

Quality Management

Asset Life Cycle Management

Environment, Health and

Safety

Fixed Asset Management

Treasury / Corporate Finance

Management

Employee Life-Cycle & Trans-action Management


Industry Solution Portfolio-Aerospace & Defense, Manufacturing

Enabling the A&D Value ChainValue Chain Element: 1

Design


Sell


Buy


Make


Move/Store


Service

Enterprise ManagementEmployee Relationship


Strategic Enterprise Management

Business Intelligence & Decision SupportBusiness Analytics Accounting

Sales Marketing Service AnalyticsSales & Marketing

Project Manufacture (R&D/MTO/ETO relevant)

Quotation & Contract Costing

Project Data Management

Program ManagementProject Definition Project Planning Project Execution

Design, Concept & Specification

Engineering, Prototyping & Product Development

Hand Over & Contract Verification

Research & Development Project Set-Up

Make to OrderProduct Development &

Configuration Management

Order Entry Processing MaInquiry & Quotation Processing

nufacture, Assembly & Shipping Quality Control

Inquiry & Quotation Processing

Concept & Product Development

Manufacture, Assembly & ShippingProject ManagementEngineering To Order

After-Market / InServiceSupport Preparation of InService Support Data Spare Parts Management Warranty / Guarantee Processing

Employee Life-Cycle & Transaction Management

Financial Supply Chain ManagementProcurement Fixed Asset ManagementBusiness Support


SAP Discrete Industry Solution Examples

Connected Service Management

Collaborative Demand Planning


Service Management Value Chain

Installed Base &Contract

Management

Customer InteractionManagement& eService

Service OrderProcessing

Service PartsManagement

Warranty ServiceAnalytics

Day-to-day control over operations

Field force productivity

Cost of service parts logistics

Maximize customer lifetime value

Strategic control over the business

Seamless service process management

Optimize people and material resources

Streamline supply chain processes

Enterprise 360 degree view for proactive customer relationship

Real-time visibility for decision support

Value Creation OpportuntitiesSome Pain Points


Customer Intimacy

Product LeadershipFocus on business process optimization and efficiency

Focus on providing and servicing leading edge

products

Focus on relationship benefits and long-term customer value

Operational Excellence

mySAP PLM mySAP SCM

mySAP CRMSales & MarketingCustomer Intelligence Pricing & Contract

ManagementChannel ManagementE-Selling

Customer and Field ServiceCustomer´Service & SupportService Operations ManagementField ServiceE-Service

Asset Service Management Product / Configuration

Management

Technical Asset Management

Preventive & Predictive Maintenance

Service Parts ManagementDemand Visibility & ForecastingParts Planning & OptimizationParts ProcurementRepair Center ManagementGlobal Parts Logistics

Creating Value with SAP Service Management


Case: Southern Pump and Tank

Installed Base &Contract

Management

Customer InteractionManagement& eService

Service OrderProcessing

Service PartsManagement

Warranty ServiceAnalytics

Customer Example, Service Order Processing

Value Added Distributor of Liquid Handling EquipmentFocus on Petroleum and Industrial MarketsSell, Design, Build, Service Established in 1935$60 million in revenue210 employeesHeadquartered in Charlotte, NC11 Branch locations in Southeast


Business Drivers and Strategy

Changing Times; Changing Business . . . .

Customers are getting larger and customer base was shrinking

Distribution business squeezed by the primary vendor and the customer

No place in the marketplace for a pure distributor

Solutions were becoming more important than the products

Products are becoming more complex

Service business was growing with higher margins

Our Vision . . .Leader in our industry We want to own the relationshipwith the customer

Achieving the vision . . .Total solution provider

Enhance value added servicesPromote our products

Expand offerings

More effectively deliver

Better business information

Technology as an enabler


Southern Pump and Tank- ROI Results

Financially . . .Reduction in inventory 28%, reduced slow and non-moving 70%

$1.2M to $330,000Reduced days from job completion to invoice generation to 3 days from 8 daysFinancial close reduced from 20+ days to 5 daysIncreased average gross margins

Streamlined service processing Improved service call dispatching and management of callsConfirmation of service billing First trip fix increased by 9%Ability for customers to track equipment and warranty information on their sites.Web enabled order entry and service request and status

Operationally . . .Seamlessly added three new operational branchesBusiness management through real-time reportingIntegrated web-enablementAccountability


SAP Discrete Industry Solution Examples

Connected Service Management




Streamlined collaborative forecasting processesSingle demand plan between business partnersLiability management for forecast partnersBalance between avoiding stock-outs and minimizing inventory Multi-level planningData analysisStatistical forecasting

Increased sales revenueIncreased service levelsReduced forecast cycle timesImproved forecast accuracyReduced inventory carrying costs

ValueValue


Proven Business Value with SAP

Planning cycle time reduced by 50%, improving overall supply

chain plan quality and stability

Increased inventory turns from 6 to 10 times and decreased channel

inventory by 32% while maintaining customer service levels,

achieving stronger sales growth, and reducing stock-outs

Decreased cash-to-cash cycle time from 23 to 14 days



Key Industry Trends


Key Take-aways


Key TakeawaysBuilding on 30 years of experience, SAP is helping discrete manufacturing companies meet business challenges by:

Providing Industry- and Segment-specific Solutions

• for A&D, IM&C, and High Tech

Offering an integrated package of solutions • which enables customers to manage complete, end-to-end business processes

Incorporating proven industry best practices to solve problems and streamline processes

• to enable faster and more effective execution, management, and measurement of critical business functions

Lowest Total Cost of Ownership

Rapid Incremental Solution Roadmap

ScalabilitySAP is the right choice for small and medium sized companies


Thank You!

… Thank You for Your Attention !

Customer Panel:Competitive Advantage with SAP

Junior Ali, VP Supply Chain, Sony of Canada

Jean Mathieu, VP Client Services, Progistix

Jeff Paddison, CIO, BreconRidge Manufacturing Solutions

SAP Value Proposition for Discrete...

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