openSAP Escm2 Week 1 Presentation PDF

Week 1 Unit 1: Trends Impacting
Demand-Driven Business Planning

Trends Impacting Demand-Driven Business Planning
Covered in this unit
Four major trends and their role in the

new world of the customer-centric
supply chain
How you can become more customer-
centric with demand-driven business
planning
The role of the digital supply chain in
enabling this evolution
2015 SAP SE or an SAP affiliate company. All rights reserved. Public 2

Trend 1: Growing middle class in emerging markets
Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
The first decade of this century witnessed a historic reduction in

global poverty and a near doubling of the middle class, but
71% of the global population still subsists on less than $10 a day,
and 1 billion people live on less than $2 a day.
Source:
Pew Research Center, A Global Middle Class Is More Promise than Reality

Trend 2: Emergence of connected consumers
Millennials
Generation Z is mobile first and mobile only, and they are

nothing like Millennials
Generation Z Source: Brian Solis, 25 Disruptive Technology Trends 2015 - 2016

Trend 3: Proliferation and convergence of channels
Catalogs
Web Sites
Social Media
Mobile
The majority of U.S. consumers are multichannel shopping,

with 69% Webrooming (browse products online and buy in-
store), and 49% Showrooming (browse products in-store and
Smart Devices
Retail buy online).
Source: Harris Interactive, Showrooming and Webrooming in the 2014 Holiday Shopping
Season
Kiosks

Trend 4: Exploding consumer and customer demand data
Demographic Data
Cellular Data Sensor Data
Retailer POS
By Market Share
By Distributors
customer
product Competitors
activity
itself (such
(such as
as 3D
point-of-
printers)
sale)
Social Media
BIG Price
By external
events
Weather Data Events
(such as
weather) Shipments
Promotions
Forecasts Sales Orders
Three basic types of data Examples

These trends are putting the customer at the center, and this customer has new expectations
Customer Centricity in an Omni-Channel Marketplace
Customers expect a sense

Customers expect quality
of urgency and speed of
and value
delivery
Customers expect Customers expect choices

consistent and positive and personalized
experience across channels experience
86% of customers are willing to pay more for a better customer experience
Source: AMEX Global Barometer

Demand-driven business planning enables a more customer-centric business
To become more customer-centric companies are embarking upon demand-driven business planning
Strategic planning is
Align strategic and becoming more
comprehensive, but must still
operational plans be aligned and reconciled
with operational plans
Need to be more responsive

Sense short-term to customers by
demand understanding near-term
consumption patterns
Need to model the complexity

and manage uncertainty of
Understand the the entire supply chain (e.g.
demand network demand network) and not just
your enterprise

Creating a digital supply chain is key to enabling this transformation
Breakthrough digitization technologies are enabling demand-driven business planning
HYPERCONNECTIVITY Align strategic and operational plans

Requires world class user experience for
analyzing and determining best plan
SUPER COMPUTING
Sense short-term demand

Requires predictive and prescriptive analytics that
CLOUD COMPUTING
can process demand data at the finest level of
granularity
SMARTER WORLD
Understand the demand network
Requires common data platform that harmonizes
CYBER SECURITY all structured and unstructured information

What you learned in this unit
Key Takeaways
Todays customers are more demanding than ever before
due to
rise of the middle class in emerging markets
emergence of connected customers
proliferation and convergence of buying channels
explosion of consumer and customer data
Demand-driven business planning enables customer-
centric supply chains
Create demand-driven supply chain by aligning strategic
and operational plans, sensing short-term demand, and
understanding the demand network
Breakthrough digitization technologies are key enablers in
the demand-driven journey

Thank you
Contact information:
open@sap.com
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Week 1 Unit 2: Importance and Challenges
of Demand-Driven Business Planning
Importance and Challenges of Demand-Driven Business Planning
How supply chain management is

affected by the explosion of demand
information
What makes it particularly challenging
to be demand-driven
Overview of the three business
priorities that companies are pursuing
to enable demand-driven business
planning (each of which is covered in
Units 3, 4, and 5 respectively)

Taking action on data is increasingly challenging
96% of marketers say the ability to make data-informed

decisions is the most important capability to respond to
disruptions; but only 13% of marketers are taking action to
Only 42% of companies say they know how to extract address disruptions and achieving measurable impact.
meaningful insights from the data available to them. Source: McKinsey & Company, Marketing disruption: Five blind spots on the
Source: Oxford Economics, Workforce 2020 road to marketing's potential

Exploding sources of demand data opens up many new business models
Demographic Data
Cellular Data Sensor Data
Retailer POS
Market Share
Distributors
Competitors
Social Media
Big Price
Weather Data Events
Shipments
Promotions
Forecasts Sales Orders
Numerous sources of demand Develop business models tailored to

and demand-influencing data consumer psyche
By 2020 it is estimated that there will be 2.5 billion connected people on social
networks, and they will be using or have access to 50 billion connected things.
Companies are taking an expanded, context-aware view of their demand network, which adds complexity
Customer-facing distribution center is no longer Every channel that touches the consumer
the edge of the realm of demand data directly or indirectly is a source of demand data

Companies seek a digital foundation for customer-centric, demand-driven enterprise
Descriptive, Engage with consumers Integrate to downstream

rescriptive, and and collaborate with applications for profitable
predictive analytics business partners demand response
Demand Source of Truth
High Performance Repository of Harmonized

Structured & Unstructured
Downstream Demand & Demand-Influencing Data
Demand-influencing
Distributor/ Market Social media
data, e.g. weather, Geo data Sensor data
wholesaler data research data data (IoT)
events, demographics,


This data then drives the business process with real-time, granular demand and market data
Execution
2 ACTION
Sales & Trade &

Demand Demand
Operations Demand
Sensing Signals
Planning Planning
<<< D a i l y >>>
1 INSIGHT Year over year, demand-related data

Monthly Weekly
is increasing over 40%
Analysis & Prediction IDC
Sales, Promotion, Market
Yearly Monthly
Share, New Product
Introduction, Out of Stock,

Companies are focusing on three key business priorities to become demand-driven
Business planning is becoming but is difficult today due to To overcome this, leading companies are
increasingly critical existing barriers. focusing on three key business priorities
Market dynamics
continue to evolve Align strategic
rapidly Data available for analysis and operational
has exploded plans
Everything is Traditional business

connected planning processes are
cumbersome
Sense short-
Channels are term demand Understand
System and organizational the demand
proliferating and
silos are preventing network
converging
effective planning

Overview: business priorities that enable demand-driven business planning
Align strategic and operational plans

Strategic planning is becoming more comprehensive, but
must still be aligned and reconciled with operational plans

Need to be more responsive to customers by understanding
near-term consumption patterns

Need to model the complexity and manage uncertainty of the
entire supply chain (e.g. demand network) and not just your
enterprise

Increasing frequency of planning cycles has exposed disconnect with execution processes
Extend Sales & Operations Planning to

Integrated Business Planning
More comprehensive business plan
Include new product and portfolio planning in business planning
Identify opportunities to increase revenue and market share
Make strategic planning more actionable

Simulate and justify calculated risks based on what-if business scenarios
Improve inventory efficiency to reduce costs
Optimize product and customer profitability
+6.9% order fill rate
When corporate finance, Allow for accelerated and more frequent planning processes
manufacturing, warehousing,
Balance demand and supply as markets change
and transportation systems and
operations are tightly integrated Employ collaborative tools to improve agility and accuracy of planning

Leading companies are embracing Sales, Inventory, and Operations Planning (S&OP)
Integrated S&OP helps companies Balance demand and supply

gather data and perform analyses to Perform consensus demand planning
and match demand with supply across the
manage uncertainty and capitalize on network
opportunities
Integrate financial objectives
Align sales and operations with financial
1%-2% Revenue Growth
targets to maximize revenue and profits
Growth in top-line revenue with
integrated sales and operations Maximize customer service
planning Improve service levels by maximizing
inventory efficiency despite increasing
volatility
5%-10% Inventory Turns
Higher turns and improved service Optimize inventory targets
levels by setting appropriate Balance the supply chain by determining
inventory targets optimal inventory targets at every tier

Companies look to reduce latency to respond to changing market dynamics
Look to final consumer of your product

Leverage the multitude of demand signals in demand plans
Pick up on market trends sooner

Use point-of-sale data in demand planning to increase the accuracy
of short-term forecasts
Optimize demand plans by consolidating long, mid, and short-term
demand stream analysis
Leverage dynamic forecasting using powerful statistical and
pattern-based recognition algorithms
Automatically position inventory

+30% Short-Term Demand Accuracy
Align inventory to promotions and near-term demand signals
Improved shorter-term demand accuracy
when demand sensing is used to refine Proactively address out-of-stock and out-of-shelf situations to
the consensus demand plan reduce revenue loss

Leading companies pursue comprehensive demand management
Comprehensive demand management Demand sensing

enables fast response, real-time demand Generate accurate daily forecasts
using pattern-recognition algorithms
visibility, and anywhere access with powerful
statistical tools to manage your plans
Demand planning
Consolidate internal and external demand
-12% days of inventory
streams with statistical forecasting
with real-time, enterprise-wide
visibility into inventory Service parts planning
Plan and manage the positioning of service
parts throughout the supply chain
-35% outbound expediting
when forecasting all combinations Forecasting and multi-level replenishment
of SKU and inventory locations Forecast demand at retail stores and plan
replenishment to those stores

To make insight-driven decisions, companies need to consider the entire demand network
Focus on systems and processes to leverage

demand signals
Harmonize key customer and market trends with enterprise
nomenclature
20% 10% Use a single source of truth for real-time, high-fidelity, granular
lost sales due to product average decline in market
demand signals to facilitate profitable demand response
out of stock share due to recurring out
of stock Empower teams with demand network analytics
Empower supply chain, sales, and marketing professionals with
insightful and actionable demand network analytics
Improve visibility to market insights
Track market trends, market size, and competitors to analyze
market share
75% -19% average ROI on Monitor sales and measure variations in promoted prices at store
of product launches fail trade promotions level to run effective promotions

Leading companies extend insight into demand network
Understand demand network to empower Sense and respond to demand insights

supply chain, sales, and marketing Gain powerful insights into sales
and market trends by combining demand
professionals with insightful and signals and market data with internal data
actionable demand network analytics
Merchandising
-29% stockouts Manage the entire merchandising lifecycle
in multichannel formats from purchasing,
assortment, pricing, promotion, and
visibility into inventory
inventory management
Fashion management
-26% revenue loss Simplify the management of wholesale,
when forecasting all combinations retail, and manufacturing processes with a
of SKU and inventory locations single solution for fashion, apparel, footwear,
accessories, and lifestyle businesses

Unique value drivers and best practices for each industry
Consumer Products
Capture real-time demand signals to gain insight into consumer preferences
Enable network-wide demand and supply visibility to ensure product availability
Chemical
Understand all sources and influencers of demand to improve forecast accuracy
Optimize product mix and asset utilization to maximize profitability
Life Sciences
Global demand and supply balancing to manage availability of active ingredients and intermediates
Multi-stage inventory optimization to buffer against demand and supply variability
High Tech
Collaborative sales and account planning to maximize revenue
Integrated product lifecycle planning to reduce risk of obsolescence
Industrial Machinery & Components
Collaborate with distribution channels to understand total demand picture
Effectively position inventory to ensure availability of critical components

Summary: Effective demand-driven business planning
Facilitate planning with real-time

Sales, Inventory and Operations Planning
information across the entire demand
network to free up working capital and Align strategic and operational plans
maximize sales revenue
Demand-Driven Business Demand Management

Planning
Sales, Inventory and Operations
Planning
Demand Network
Demand Management
Demand Network

Key Takeaways
Importance of extending supply chain view across
demand network
Challenges of incorporating many sources of demand
information
Overview of the business priorities companies are
pursuing to
align strategic and operational plans
sense short-term demand
understand the demand network

Thank you
open@sap.com

Week 1 Unit 3: Sales, Inventory,
and Operations Planning
Sales, Inventory, and Operations Planning
Real challenges of Sales, Inventory,

and Operations Planning (S&OP)
Mastering S&OP with a digital
foundation
Integrated business planning for sales
and operations
Integrated business planning for
inventory
Solution demonstration

Real challenges drive the evolution of Sales & Operations Planning
Disparate data sources, Finance: Hows

our overall margin Sales Mgmt:
perspectives, and disconnected impacted by our Can we
processes growth in BRIC? support this
Finance
Sales new account?
Siloed planning with functional
goals ERP
GM/CXO:
Ad hoc collaboration via e-mail, How do we
Excel make sureOperations
we
dont miss the
quarter?
Planning decisions made without CRM
considering supply chain

constraints and profitability Marketing
Marketing: How will SCM
a pricing change
impact demand for my Supply Chain:
No ability to simulate and highest volume Where/when am
I going to source
understand impact of decisions product family?
this new product

Traditional S&OP does not account for inventory uncertainty
which results in an incomplete business plan
Distribution Centers
Expectations for high customer service
Capture full complexity of supply chain
Customers
Minimize working capital Supply
Uncertainty
Demand
Uncertainty
Suppliers

Leading companies run the Sales, Inventory, and Operations Planning process
on a digital foundation
Complete Real-Time What-If Collaboration Intuitive User
Scalable Model Scenario Interfaces
Planning
Supply
Demand Finance
Demand, supply Real-time Transparent Access anytime

chain, and financial scenarios and communication, via Web, Excel,
model at simulation on record decisions and Mobile user
aggregate & entire model interfaces
detailed levels
Inventory Material & Executive

Sales and Consensus Revenue &
Target Capacity- Review &
Marketing Demand Profit
Setting & Constrained Real-Time
Forecasting Planning Impact
Projections Planning Analytics

Companies gain competitive advantage with SAP Integrated Business Planning
for sales and operations
Create the optimal business plan to

drive revenue growth and increase
market share
Effectively balance demand and

supply and attain financial targets
Increase speed and agility of

planning and drive most profitable
responses
Improve forecast accuracy and on-

time delivery

Companies master the inventory challenge with SAP Integrated Business Planning
for inventory
Improve customer service levels
Maximize the efficiency of inventory

and working capital
Improve planner productivity,

standardize planning processes
Standardize the inventory target-

setting process at each tier within
the supply chain to feed operational
plans
Reduce production and distribution

costs

SAP Integrated Business Planning solution for S&OP
is a unified and real-time planning solution
Integrated S&OP helps companies Balance Demand and Supply
gather data and perform analyses to Perform consensus demand planning, and
match demand with supply across the
manage uncertainty and capitalize on network
opportunities
Integrate Financial Objectives
Align sales and operations with financial
1%-2% Revenue Growth
targets to maximize revenue and profits
Growth in top-line revenue with
integrated sales and operations Maximize Customer Service
planning Improve service levels by maximizing
inventory efficiency despite increasing
volatility
5%-10% Inventory Turns
Higher turns and improved service Optimize Inventory Targets
levels by setting appropriate Balance the supply chain by determining
inventory targets optimal inventory targets at every tier


Key Takeaways
Companies face challenges in creating a unified
business plan due to disparate processes, systems,
and data
SAP Integrated Business Planning solutions for S&OP
enables collaborative planning and decision making
across the entire enterprise
SAP customers have achieved tremendous benefits in
revenue growth, higher inventory turns, and improved
customer service

Thank you
open@sap.com

Week 1 Unit 4:
Demand Management
Demand Management
Challenges in demand management

Key capabilities for addressing
challenges
SAP solutions for demand
management

Demand Management
Current challenges
Disparate Collaboration, Lack of Context

Not Automated, Trial & Error, Wrong Level
of Aggregation Lack of internal collaboration
Poor forecast performance
Disconnected from S&OP

Too Much Aggregation, Not Timely
Unable to understand impact on
Limited demand signal
business performance
visibility

Demand Management
Key inputs for forecast accuracy
Statistical Forecast
Robust models
Sales Input
Account plans
Market intelligence
Promotions/Events
Downstream Demand Signals
POS data
Distributor movements
S&OP Plans

Demand Management
Demand sensing
Follow daily demand patterns

Use of pattern recognition algorithms
Adjust consensus demand and drive

to execution level
Better daily accuracy drives:
Lower inventory
Better deployment of products
Better transportation planning

Demand Management
Leading companies pursue comprehensive demand management
Comprehensive demand management Demand Sensing

enables fast response, real-time demand Generate accurate daily forecasts using
pattern-recognition algorithms
visibility, anywhere access with powerful
statistical tools to manage your plans
Demand Planning
Consolidate internal and external demand
-12% Days of Inventory
streams with statistical forecasting
visibility into inventory Service Parts Planning
Plan and manage the positioning of service
parts throughout the supply chain
-35% Outbound Expediting
when forecasting all combinations Forecasting and Multi-Level Replenishment
of SKU and inventory locations Forecast demand at retail stores, and plan
replenishment to those stores

Demand Management

Demand Management
Key Takeaways
Companies face challenges in their demand
management processes, such as forecast accuracy
and providing visibility to demand signals
SAPs solutions for demand management enable
companies to effectively manage their demand with
powerful algorithms, easy-to-use and collaborative
tools, and integration with relevant data sources
SAP customers have benefited from higher forecast
accuracy, higher inventory turns, and improved
efficiency

Thank you
open@sap.com

Week 1 Unit 5:
Demand Network
Demand Network
The heightened need to be customer-

centric in todays digital economy
How SAP Demand Network solution
can help companies towards this goal
Demonstration and customer example

Demand Network
Understanding the Demand Network Requires Real-time Visibility and Information
20% sales lost due to product out of stock

Raw Material Distribution
27% sales lost due to product wanted not Suppliers Center
available in assortment
Packagins
85% new product launches fail in Supplier Manufacturing
CPG within two years
Retail
-19% average ROI on trade Customers
promotion spend
Distributor or
Wholesaller
10% decline in market share on average due
to recurring out of stock Customers
82% of consumers will substitute and switch

brands due to an out of stock product

Demand Network
The omni-channel demand network of today requires understanding the end-customer
79% of customers spend at least
27% of their total shopping time

researching products on line
53% new of customers abandoned

an in-store purchase due to
negative online sentiments
59% of customers are willing to try

a new brand to get better
customer service

Demand Network
Leading companies extend insight into demand network
Understand Demand Network to Sense and respond to demand insights
empower supply chain, sales, and Gain powerful insights into sales and market
trends by combining demand signals and
marketing professionals with insightful market data with internal data
and actionable demand network analytics
Merchandising
-29% Stockouts Manage the entire merchandising lifecycle
in multichannel formats from purchasing,
With real-time, enterprise-wide
assortment, pricing, promotion and
visibility into inventory
inventory management
Fashion management
-26% Revenue loss Simplify the management of wholesale, retail
When forecasting all combinations and manufacturing processes with a single
of SKU and inventory locations solution for fashion, apparel, footwear,
accessories and lifestyle businesses

Demand Network
SAP Demand Signal Management (DSiM)
Predictive
Global Customer Integrated
Trade Analytics for Demand Third Party
Market Business Business
Management Sales & Planning Applications
Share Planning Planning
Marketing
Easy-to-use & state-of-the-art user experience

Core SAP HANA Repository
DSiM
Business Suite
S/4 HANA
Process Control & Monitoring
Data
Data Global MRD Data
Data Upload Quality
Harmonization Provisioning Enrichment
Validation
Retailer Distributor/ Market research social media Additional information

Geo data Sensor data (IoT)
POS wholesaler data data data (e.g., weather)

Demand Network
Sales Performance Insights Using Point of Sales Data
Cross-Retailer, Cross-Country, Cross-Category

Demand Network
Global and Local Market Share Analysis Multiple Syndicated Data Sources

Demand Network
Helping adidas Group Follow New and Innovative Paths

Demand Network
What have you learned in this unit?
Key Take Aways

Companies face challenges in being demand-driven
given the complexity and lack of visibility within the
demand network
Companies face challenges in becoming customer-
centric in a digitally-connected, socially-networked and
omni-channel world
SAPs solutions for demand network enable companies
to master the demand network with real-time visibility
and become customer-centric by aligning their entire
end-to-end supply chain processes, across all
channels
SAP customers have benefited from improved visibility,
reduced stock-outs, and reduced revenue losses

Thank you
open@sap.com

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Week 1 Unit 1: Trends Impacting

Demand-Driven Business Planning

Four major trends and their role in the

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 2

The first decade of this century witnessed a historic reduction in

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 3

Generation Z is mobile first and mobile only, and they are

Generation Z Source: Brian Solis, 25 Disruptive Technology Trends 2015 - 2016

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 4

The majority of U.S. consumers are multichannel shopping,

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 5

Three basic types of data Examples

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 6

Customer Centricity in an Omni-Channel Marketplace

Customers expect a sense

Customers expect Customers expect choices

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 7

Need to be more responsive

Need to model the complexity

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 8

Breakthrough digitization technologies are enabling demand-driven business planning

HYPERCONNECTIVITY Align strategic and operational plans

Sense short-term demand

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 9

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 10

National product specifications may vary.

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 12

How supply chain management is

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 2

96% of marketers say the ability to make data-informed

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 3

Weather Data Events

Numerous sources of demand Develop business models tailored to

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 5

Descriptive, Engage with consumers Integrate to downstream

Demand Source of Truth

High Performance Repository of Harmonized

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 6

Sales & Trade &

1 INSIGHT Year over year, demand-related data

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 7

Everything is Traditional business

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 8

Align strategic and operational plans

Sense short-term demand

Understand the demand network

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 9

Extend Sales & Operations Planning to

Make strategic planning more actionable

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 10

Integrated S&OP helps companies Balance demand and supply

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 11

Look to final consumer of your product

Pick up on market trends sooner

Automatically position inventory

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 12

Comprehensive demand management Demand sensing

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 13

Focus on systems and processes to leverage

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 14

Understand demand network to empower Sense and respond to demand insights

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 15

2015 SAP SE or an SAP affiliate company. All rights reserved. Public 16