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
SAP AG 2003, Title of Presentation, Presenter 3
Leveraging Trends for Competitive Advantage
Key Industry Trends
Leading Edge Solutions for Discrete Manufacturing
Key Take-Aways
SAP AG 2003, Title of Presentation, Presenter 4
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
SAP AG 2003, Title of Presentation, Presenter 5
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
SAP AG 2003, Title of Presentation, Presenter 7
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 AG 2003, Title of Presentation, Presenter 8
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, …
SAP AG 2003, Title of Presentation, Presenter 11
Leveraging Trends for Competitive Advantage
Key Industry Trends
Leading Edge Solutions for Discrete Manufacturing
Key Take-aways
SAP AG 2003, Title of Presentation, Presenter 12
Industry Solution Portfolio- High Tech
Enabling the High Tech Value ChainValue Chain Element: 1
Design
Value Chain Element: 2
Sell
Value Chain Element: 3
Buy
Value Chain Element: 4
Make
Value Chain Element: 5
Move/Store
Value Chain Element: 5
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
Product Data Management
Supply Chain Planning
Component & Services
Procurement
Order Management
Contract & Inhouse
ManufacturingDistribution
IBaseManagement &
Upgrades
Software ProviderCustom
Development Specification
Software Development
Professional Services
Product Data Management
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
SAP AG 2003, Title of Presentation, Presenter 13
Industry Solution Portfolio-Industrial Machinery & Components
Enabling the IM&C Value ChainValue Chain Element: 1
Design
Value Chain Element: 2
Sell
Value Chain Element: 3
Buy
Value Chain Element: 4
Make
Value Chain Element: 5
Move/Store
Value Chain Element: 5
Service
Enterprise Management Strategic Enterprise Management Business Analytics Business Intelligence &
Decision Support AccountingEmployee Relationship
Management & Workforce Analytics
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
SAP AG 2003, Title of Presentation, Presenter 14
Industry Solution Portfolio-Aerospace & Defense, Manufacturing
Enabling the A&D Value ChainValue Chain Element: 1
Design
Value Chain Element: 2
Sell
Value Chain Element: 3
Buy
Value Chain Element: 4
Make
Value Chain Element: 5
Move/Store
Value Chain Element: 5
Service
Enterprise ManagementEmployee Relationship
Management & Workforce Analytics
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 AG 2003, Title of Presentation, Presenter 15
SAP Discrete Industry Solution Examples
Connected Service Management
Collaborative Demand Planning
SAP AG 2003, Title of Presentation, Presenter 16
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
SAP AG 2003, Title of Presentation, Presenter 17
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
SAP AG 2003, Title of Presentation, Presenter 18
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
SAP AG 2003, Title of Presentation, Presenter 19
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
SAP AG 2003, Title of Presentation, Presenter 20
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 AG 2003, Title of Presentation, Presenter 21
SAP Discrete Industry Solution Examples
Connected Service Management
Collaborative Demand Planning
SAP AG 2003, Title of Presentation, Presenter 22
Collaborative Demand Planning
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
SAP AG 2003, Title of Presentation, Presenter 23
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
SAP AG 2003, Title of Presentation, Presenter 24
Leveraging Trends for Competitive Advantage
Key Industry Trends
Leading Edge Solutions for Discrete Manufacturing
Key Take-aways
SAP AG 2003, Title of Presentation, Presenter 25
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
Top Related