SNC02 Roadmap Supplier

Collaboration
Consulting service to evaluate and prioritize
supplier collaboration processes developing a
customer-specific project roadmap

Agenda

1.
2.
3.
4.

Situation at the Customer, Starting Point

Service Description
Benefits for the Customer
Appendix

SAP 2008 / Page 2

customer

Situation at the Customer, Starting Point

Customers who practice supplier collaboration processes but would like to

improve the scope, organization and the current application platform in place to
support the SC business processes
Customers in the definition phase of supplier collaboration business processes
who would like to structure the mid- to long-term project roadmap and IT architecture
to implement and support SC

SAP 2008 / Page 3

customer

Agenda

1.
2.
3.
4.

Situation at the Customer, Starting Point

Service Description
Benefits for the Customer
Appendix

SAP 2008 / Page 4

customer

Service Description (1/2)

The definition and periodic review of a roadmap for supplier collaboration is

structured as follows:
Preparation: Scope and organization of the roadmap development are defined and the
workshop schedule is set up.
Identification: As-is SC process verification is done based on the to-be SC processes
identifying potentials and relevant KPIs
Focusing: Based on potential analysis, the relevant processes are mapped into SAPs
solution portfolio. Strategic relevance and value contribution are determined. Changes to
current organization and IT architecture are identified
Roadmap development: Content, dependencies and sequence of building blocks are
consolidated in the Strategic roadmap for supplier collaboration
Realization coaching: Verify and adjust roadmap based on business-, IT- and external
impacts and secure quality of the roadmap implementation

SAP 2008 / Page 5

customer

Service Description (2/2): Strategic Roadmap

Development for Supplier Collaboration
Preparation

Identification

Focussing

Prepare & hold

preparation
meeting
Define required
project resources
& structure
Agree on scope
and level of detail
Define workshop
schedule
Prepare kick-off
meeting

Trends in the area

of SC
Verify as-is
processes in SC
at customer
Discuss
customers
business drivers
Potential analysis
of customer as-is
processes and
organizations in
SC
Identify relevant
KPIs for as-is
processes
Identify impacted
IT applications

Mapping of
customer SC
processes to
SAPs SC
solutions
Impact analysis on
as-is processes,
organization and
applications
Determine value
contribution of SC
processes
Identify strategic
relevance of SC
processes
Determine future
IT architecture
and evaluate
alternatives

proposal

1 day

SAP 2008 / Page 6

13x 2-day onsite workshops

26x 2-day
on-site workshops

Roadmap
development
Determine project
roadmap content
Identify
dependencies of
roadmap building
blocks
Determine
sequence of
building blocks
Roadmap set-up
Define
organization to
implement
roadmap
Collect relevant
change
management
topics
12x 2-day onsite workshops

Realization
coaching
Verify and adjust
roadmap based
on business-, ITand external
impacts
Secure quality of
roadmap
implementation

Quarterly 2-day/
monthly 3-day
reviews

customer

High-Level Processes of Supplier Collaboration That Are Basis for Roadmap Development

Solutions
SAP 2008 / Page 7

Establish longterm sourcing

relationships
Evaluation
(external and
internal data)
Supplier
discovery

Price &
Products

Supplier
Evaluation

I-layer

Business
processes

Objectives

Strategic
Sourcing

Biz.
Partner

ERP

SCM

Design &
Product Livecycle Mgmt

Make or Buy
Integration of
supplier in
product
development live
cycle
Engineering
Change Mgt.

New Product
Development

Procurement
Planning
Determination
and execution of
planning strategy
for external
procured parts

Contract
Management

Design
collaboration

Biz.
Objects

SRM

Collaborative
Forecasting

New Product
Introduction

replenishment of
external parts
from seller to
buyer involving
supporting
parties (LSPs)
Order-based
collaboration

Product liveCycle Mgt.

Systems
Services

BI

PLM

Fulfillment

Invoicing of
material and
services
Dispute
management in
case of issues

3PL
integration

Demand-based
Collaboration

xAPPs

E-Invoicing

ReplenishMent exec.

Exchg.
Standards

Billing &
Dispute
Management

Dispute
Management

Returns
management

Channels

EP

XI

customer

Results Along the Roadmap Definition

What should be implemented? How?

Business process
prioritization

Enterprise
Structure

Implementation
Roadmap

Solution Design &

SCM Biz. Processes

Process Prioritization

Applications in Regions

Projects, Effort
Sequence, Releases

Value
contribution

Strategic
relevance

Regions

SCM Applications

Periodic evaluation of solution clusters for suitable system landscape(s) supporting SC

Solution cluster 1

SAP 2008 / Page 8

Solution cluster 2

Solution cluster n

customer

Service Offering: General Information

Consulting effort [MD]:

Effort estimate based on what level of investigation the customer likes to develop the
roadmap, on a fixed price

Internal effort customer:

IT: % based on external effort
Business: % based on external effort

SAP 2008 / Page 9

customer

Result Example Process Weaknesses and

Improvement Areas
As-is

To-Be

Processes

CPI* Process
Documentation templates

CPI* Process
Documentation templates

Transition
Main Process areas
and Architecture**

Main Process areas

and Architecture**

Architecture

Transition

Interface
Documentation

Interface
Documentation

Transition

* Customer process innovation, ** Process content provided by SAP Consulting based on CPI initiative
SAP 2008 / Page 10

customer

Result Example Prioritization of Supplier

Collaboration Topics
Central fields of activity to
improve value-contribution of SC processes
easy

Simplicity of implementation

5
3
4

complex

low

Strategic relevance

= Size equals value-contribution potential

SAP 2008 / Page 11

high

Strategic Sourcing
Improved transparency by centralizing
purchasing contracts and volumes
Introduction to auctioning and bidding
Design & Product Live Cycle Mgmt
Collaboration of documents for purchased
parts with business partners involved into
inbound procurement and outsourced
manufacturing
Less errors in outsourced manufacturing
processes due to transparency in
Engineering change management with
subcontractors

Billing & Dispute management

Lower process costs improving invoicing
and ERS with suppliers

Fulfillment processing
Improved planning by Transparency of
SIT
Less labeling errors

Procurement Planning
Less process costs by improved
collaboration processes
Reduction of troubleshooting
customer

Result Example Value Contribution

Improvement of Focus Areas
Type

KPI

Low*

Avg*

Impv.*

Calc. Basis

Area of Improvement

One
Time

Reduced Inventory - One

Time

21,8

32,7

10-15 %

217,9 (AR)

Einmaleffekt durch Reduzierung laufender

Bestnde

Annual

Reduced Inventory
Carrying Costs

3,3

4,9

10-15 %

15 % = 32,7
Mio Material
(re-) Handling
and COC

Reduzierung durch akkurate

SAP SCM der
Bedarfsvorhersage und Transparernz
Bestnde
APO (RT)

Demand- &
Akkurate Bedarfsvorhersagen
Supply und
bedarfsgerechte Produktion
Planning

Annual

Reduced Obsolete
Inventory

1,3

2,0

20-30 %

3 % = 6,5 m
(Abschreibung)

Annual

Improved Planning
Productivity

1,0

1,2

25-30%

60 FTE = 3,9 m
(65K each)

Annual

Reduced Transportation
Costs

3,6

7,2

5-10%

5% = 72 m
Total Trans cost

Reduzierung von Premiumkosten durch

SNC
akkurate Bedarfs-vorhersage und weniger
SAP SCM
Supply
Ersatz-lieferungen
(Returns)
aufgrund
schlechter
Qualitt
Execution
Network

Annual

Reduced Manufacturing
Cost by better Planning &
Visibility

14,1

23,5

3-5%

470 m
Manufacturing
Cost

Annual

Reduced Direct Material

Spend

4,0

8,1

1-2%

400 m (ca. 25%

Revenue)

Annual

Procurement Staff
Efficiency

1,4

1,7

10-12%

250FTE = 14 m
(55K each)

Erhhung der Transparenz bzgl.

Collaboration,
Fertigungskapazitten
und Bestnde ber
Outsourced
globales Netzwerk
(inkl.
Partner)
SAP
SRM
Manufacturing
Ausnutzung von bspw. Mengendiscouts
Supplier
sowie Einhaltung vonRelationship
Lieferzeiten durch
Prozessstandardisierung
Management

Standardisierte und automatisierte

Prozesse

SAP SCM

Standardisierte und automatisierte

Prozesse im Einkauf

* outside-in approach, e.g. by using benchmarks, etc.

SAP 2008 / Page 12

customer

Result Example Customer-Specific Project

Roadmap for SC
<year>
J

<year>
A

Improve SC processes
Introduce SRM central contract mgmt
Introduce outsourced mfg. with SNC &
cFolders

Improve system architecture

Upgrade SCM systems
Harmonize supplier relevant data

Global roll-out
Roll-out region 1
Roll-out region 2
today

Legend:

SAP 2008 / Page 13

Duration

Milestone

customer

Agenda

1.
2.
3.
4.

Situation at the Customer, Starting Point

Service Description
Benefits for the Customer
Appendix

SAP 2008 / Page 14

customer

Benefits for the Customer

Identify the benefit areas of supplier collaboration within the customer purchasing
organization
Structure implementation projects and highlight dependencies to other building blocks in a
strategic roadmap
Channel the customers focus areas
Enable customer to sell an SCM project internally providing dates, figures, outside-in
value proposition
Mid-term guidance of customer activities in the area of supplier collaboration

SAP 2008 / Page 15

customer

Agenda

1.
2.
3.
4.

Situation at the Customer, Starting Point

Service Description
Benefits for the Customer
Appendix

SAP 2008 / Page 16

customer

Thank you!

SAP 2008 / Page 17

customer

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customer