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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!
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