Transform Supply Chain

with SAP

The Business Value for Supply Chain with

SAP S/4HANA, Cloud/ Line-of-Business
Applications and SAP Leonardo

PUBLIC
SAP Integrated Business Planning (SAP IBP) live at
Microsoft Corporation

Hear from Microsoft executives on how

they are using SAP IBP to realize their
Innovation Supply Chain. The solution
helps the company build a demand-
driven supply chain, that understands
and fulfills consumers’ demand at their
request and meets their expectations.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

 White Paper Background
and Key Definitions
The information outlined below will help you understand the contents of this value proposition white
paper. It gives details on the objectives and scope of the paper. Key definitions are also provided.

DELIVERABLE OBJECTIVE Business Benefits

Provides information on the value in moving from an ERP on a Key value drivers that are impacted by the adoption of
traditional database to SAP S/4HANA, Cloud/ Line-of-Business SAP S/4HANA, Cloud/ LoB applications and SAP
Leonardo solutions.
(LoB) applications and SAP Leonardo solutions.

. With the value proposition section, all quantified

KEYDEFINITIONS
Within the process and subprocess deep dives, there is detailed
content in table format articulating the following:
Typical Pain Points
Major customer business and IT challenges.
Current State with ERP on Traditional Database
ERP capabilities that are available on a traditional database.
SAP S/4HANA Capabilities
Capabilities shipped with the latest release of SAP S/4HANA,
including apps that are optimized for SAP Leonardo, such as an
app for contract consumption.
benefits are conservative, estimated improvement
ranges tied to the top value drivers. They are based on
early adopters or new developments and enhancements
of SAP S/4HANA, Cloud/ LoB applications and SAP
Leonardo solutions that can drive value. Keep in mind
that these benefits should be used as a guide. We
recommend working together to assess your current
maturity and the value of moving to SAP S/4HANA,
Cloud/ LoB applications and SAP Leonardo solutions to
develop a personalized business case.
Last Update
SAP S/4HANA 1709 release. All Leonardo
capabilities are highlighted in bold.

Cloud/ LoB and SAP Leonardo Solution Capabilities
Solutions that can be integrated with SAP S/4HANA and provide
business value ‒ for example, the SAP Integrated Business
Planning solution or SAP Connected Goods software. These
solutions are not embedded in SAP S/4HANA but these can be
integrated.
*Detailed road map available on SAP.com
(customer login required)
This document and SAP’s strategy and possible future
developments are subject to change and may be
changed by SAP at any time for any reason without
notice. This document is provided without a warranty of

2018: Planned Innovations*
New functionalities planned for the 2018 release of
SAP S/4HANA, Cloud/ LoB applications and SAP
Leonardo solutions.
any kind, either express or implied, included but not
limited to, the implied warranties of merchantability,
fitness for a particular purpose, or non-infringement.

© 2018
© 2018
SAP SAP
SE orSE
anorSAP
an SAP
affiliate
affiliate
company.
company.
All rights
All rights
reserved. ǀ
reserved. ǀ PUBLIC
PUBLIC 3
 Agenda

Supply Chain Overview 5

End-to-End Business Scenarios 8

Process Deep Dive 11

Digital Priorities 21

Value Proposition Summary 22

Customer References 23

Appendix 25

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Supply Chain in a Digital Economy Prestige Brands

TRANSFORM SUPPLY CHAIN WITH SAP Prestige Brands Implemented the SAP® Integrated
Business Planning Solution to support account
Digitization of the economy is continuing to accelerate the pace of innovation, shortening the product lifecycle and increasing the planning
demand volatility. At the same time supply chains are becoming global and increasingly complex. To be in a position to create and
capture opportunities, companies must develop an environment in which they can manage information and processes simultaneously “ With SAP Integrated Business Planning, our
across the extended supply chain. This evolution of supply chains is more connected, intelligent, responsive, and predictive. It enables sales VP can do annual sales quota planning in a
companies to drive customer-centric processes and deliver personalized products uniquely built and delivered for the “segment of one.” few hours compared to days. All sales team
These demanding customers have to be serviced across a business network of global partners that are increasingly challenged by members can collaborate and achieve
resource scarcity. This transformation will continue to impact the business processes and systems that are required to remain
consensus sales forecast numbers centrally and
competitive. It will change how we design, plan, make, ship, and operate our products and assets.
provide visibility to the management team
instantaneously. Bizbrain Technologies
SAP S/4HANA Supply Chain, cloud applications such as SAP Ariba solutions and SAP Integrated Business Planning, and SAP Leonardo
delivered this project, from concept to going
support a digital supply chain strategy with a digital value network that acts as an enabler for business transformation. The digital value
network starts with a digital core that interconnects all aspects of the value network in real time to drive business outcomes. The digital live, in 12 weeks. This is a very fast ROI. ”

core not only connects every aspect of internal operations but also enables real-time workforce engagement, supplier collaboration,
Matt Flood, Vice-President and CIO, Prestige
outcome-based omnichannel consumer experience, and other market dynamics with Internet of Things (IoT) and Big Data scenarios.
Brands Holdings Inc.

Gulftainer

Gulftainer Implemented SAP S/4HANA to meet its

current and future requirements

Predictive Forecasting Demand Driven Material
and Demand Sensing Requirement Planning
(DDMRP)
Short-term demand Dynamic planning of
prediction with demand replenishments with DDMRP
sensing algorithms . which is fully integrated into
existing MRP concept.
Remote capture and
analysis of sensor data from Replenishment only for real
connected devices and demand and introduction of
feeding to demand buffers at strategically
management process. important points.
Live Inventory
Management
Live inventory management
enabling unlimited
simultaneous material
movements and allowing for
true transparency on
inventory and material flows.
Decreased stock buffers due
to better transparency and
insights.
Warehousing and “ At Gulftainer, we are committed to providing the
Transportation on
highest standards of operational efficiency. SAP
One Platform
S/4HANA will enable a more efficient, cost-
Single warehousing
effective movement of international business
platform for all warehousing
operations, including through our terminals, providing the actionable
optimization, automation, data necessary to increase productivity and
and labor management.
reduce costs. ”
Single transportation
platform with basic and Ramesh Shivakumaran, Group Director Business
advanced shipping Services, Gulftainer Company Limited
functionality and real-time
embedded analytics.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SAP SUPPLY CHAIN VALUE PROPOSITION SUMMARY

SAP solutions enable companies to substantially enhance, simplify, and visualize the entire supply chain process.

Reduced Days in Inventory with Live Inventory Improved Supply Chain Planning FTE Productivity
Management and Demand Driven MRP (DDMRP) with SAP Integrated Business Planning and SAP Fiori

Live inventory management through a redesigned data model
enables unlimited simultaneous material movements and allows
for true transparency on inventory and material flows. It also
provides improved material planning with faster, more frequent
Material Requirement Planning (MRP) runs – multiple times a
day, with planning and rapid replanning in minutes instead of
hours to minimize inventory. It is now possible to replenish only
for real demand and introduce buffers at strategically important
points (Demand Driven Material Requirement Planning -
DDMRP).
Reduction in Revenue Loss Due to Fulfillment Issues
with Advanced Available to Promise (AATP)
The solution enables intelligent, real-time product availability
check for sales, planned and production orders. It includes
scalable Available to Promise (ATP) for managing large
transaction volumes and flexible allocation management
capabilities. It provides back-order processing with intuitive
priority classification and interactive exception handling.
Supply chain planning productivity is enhanced through easy-to-
use Microsoft Excel and analytics-based planning interfaces in
conjunction with SAP Integrated Business Planning (IBP). This
helps production and material planners execute critical daily
tasks with embedded decision support analytics and SAP Fiori
role-based user interface applications.
Reduced TCO Through Landscape Simplification with
Embedded Solutions in SAP S/4HANA
Faster business outcomes are achieved with reduced
operational cost, thanks to simplified system landscapes.
Redesigned data structure and embedded solutions in SAP
S/4HANA result in fewer systems and interfaces. For example -
SAP Extended Warehouse Management
(SAP EWM) and SAP Transportation Management (SAP TM)
applications embedded in the SAP S/4HANA core.

Reduce Overall Supply Chain Planning Cost with

What-If and Scenario Planning

S/4HANA digital core in conjunction with SAP Integrated

Business Planning for sales and operations enables integrated,
continuous and iterative supply chain planning. It includes what-
if and scenario planning to react to market demand through the
best service at lowest cost. Manufacturing costs and premium
freight expenses are reduced with detailed constrained planning
and scheduling, enabling agility and efficient use of capacity.

© 2018
© 2018
SAP SAP
SE orSE
anorSAP
an SAP
affiliate
affiliate
company.
company.
All rights
All rights
reserved. ǀ
reserved. ǀ PUBLIC
PUBLIC 6
 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SAP’s Digital Business Framework for Supply Chain

SAP solutions enable organizations to drive business value across their end-to-end digital value chain.

SUPPLIER COLLABORATION WORKFORCE ENGAGEMENT S/4HANA DIGITAL CORE ASSETS AND SUPPLY CHAIN CUSTOMER EXPERIENCE

• Extended Warehouse Management SAP Integrated Business Planning (IBP)

• SAP Hybris Cloud for Sales
SAP Ariba Solutions for Direct Spend • SAP Fieldglass solutions • IBP for Response and Supply
• Transportation Management
• SAP Ariba Supply Chain • IBP for S&OP (Sales and
• Extended Production Scheduling and
Collaboration Operations Planning)
Delivery Planning
• SAP Ariba Strategic Sourcing Suite • IBP for Inventory
• SAP SuccessFactors solutions • Advanced Inventory Management
• SAP Ariba Supply Chain Mobile App • Supply Chain Control Tower SAP Integrated Business Planning
(IBP)
Ariba Network (integrating the entire
SAP Leonardo
buying process for the organization) • IBP for Demand
• SAP Vehicle Insights
SAP Leonardo
• SAP Asset Intelligence Network
• SAP Connected Goods
SAP Integrated Business Planning (IBP) • SAP Global Track and Trace
• IBP for Response and Supply • SAP Predictive Maintenance
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7
 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

End-to-End Business Scenarios

Some organizations measure value by the impact to their end to end processes. Outlined below are the primary end-to-end processes that are
important to a supply chain organization.

‘Plan to Position’ is an end-to-end supply chain planning scenario which relates to

production, procurement and positioning the product in the supply chain in anticipation
1. PLAN TO POSITION of demand.

The scenario starts with setting business objectives and includes the tactical and
operational decisions to set the demand plan, capacities and inventory targets.

‘Order to Delivery’ is an end-to-end supply chain planning and execution scenario which
relates to efficient order fulfillment and delivery.
2. ORDER TO DELIVERY
The scenario starts with capturing a sales order and includes order confirmation,
material requirement planning , production, procurement and ends with material
dispatch.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix
Reimagine Plan to Position
Traditional Planning
Sales & Operations
Planning
Alignment between sales plan
and capacity plan excluding
inventory targets
Limited financial alignment with
business plan
The New World With SAP
Integrated Business
Planning
Holistic alignment to business
plan including financials and
inventory target setting,
supported by internal
collaboration
TOP VALUE Reduce Supply Chain Planning Cost
DRIVERS
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC
Demand Planning
Classical statistical forecasting
and consensus demand planning
process based on historical data,
often leading to unsatisfactory
accuracy
Demand Planning
& Sensing
Demand plans consider demand
signals from orders, shelf, and
web with intelligent adjustments
to eliminate bias and determine
optimum forecast parameters
Increase Forecast Accuracy
Supply
Planning
Propagation of supply requirements
through company’s network with
limited consideration of business
priorities and no connection to
fulfillment planning
Response &
Supply Planning
Finite planning based on optimization
or business priority rules,
coordinated electronically with
trading partners, with full pegging
visibility and generation of allocation
plans to govern order promising
Reduce Revenue Loss due to Fulfillment Issues
Manual
Adjustment
Use of emails, phone calls, and
spreadsheets to resolve issues
when there is a supply
disruption or a demand change
to determine how to respond
Scenario Planning
& collaboration
Full visibility to demand and
supply across the extended
network, to simulate changes
to plan, with root cause
analysis to understand and
resolve issues
9
 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Reimagine Order to Delivery

Traditional Planning

Sales Order Sales order Scheduled MRP Purchase Inventory Outbound Delivery, In-Transit tracking
Capture confirmation Requisitioning/ Production Management Transport Planning
& Dispatch

Delivery commitments No ability to re-run MRP No way of knowing if a Increased safety buffers Transportation process No ‘out of the box’ event
based on outdated data, during the day. Material reliable supplier nearby to make up for the lack of taking place in disparate tracking capabilities
resulting in cancelled or shortages not known could have delivered the inventory invisibility, systems with inefficient
delayed orders instantly, delaying missing part in time locking up capital business partner Analytics and reporting
production collaboration done in a separate
Delayed material Interface needed business warehousing
postings due to high between ERP and Limited optimization system with no real time
volume of production extended warehouse possibilities data update
transactions. Inability to management application
respond to production
The New World With SAP
issues on time

Sales order Online Order Live MRP Purchase Inventory Outbound Delivery, In-Transit tracking
Capture Confirmation Requisitioning / Production Management Transport Planning
& Dispatch

Up-to-date inventory MRP runs possible Automated decision Minimized safety stock Single platform for Insights in to
information resulting in multiple times a day. recommendations and with just-in-time material transportation transportation
realistic fulfillment Material shortages integrations in to Ariba availability management with real- execution, tracking
commitments. Rule- identified instantly network quickly locates time embedded analytics goods and assets in
based product allocations the best supplier Single warehousing transit (SAP Global track
platform for all Capacity management, and Trace)
Minimized safety stock warehousing operations planning, collaboration Analyze vehicle and
with just-in-time material execution, charge sensor data in real time,
availability management and optimizing logistics and
settlement in one system improving service ( SAP
Vehicle Insights)

TOP VALUE
Improve Customer Service Reduce Inventory Carrying Cost Reduce Logistics Cost
DRIVERS

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 10

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SUPPLY CHAIN MANAGEMENT (SCM) CAPABILITIES

Outlined below are the primary capabilities for SCM where value can be achieved through SAP S/4HANA,
Cloud/ LoB applications and SAP Leonardo solutions.

Digital Business Planning Digital Logistics and Order Fulfillment

• Demand Management and Insights • Warehouse Management

• Sales, Inventory and Operations Planning • Transportation Management

• Response and Supply Management • Logistics Network

© 2018
© 2018
SAP SAP
SE orSE
anorSAP
an SAP
affiliate
affiliate
company.
company.
All rights
All rights
reserved. ǀ
reserved. ǀ PUBLIC
PUBLIC 11
 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Business Planning Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Inability to include • Basic demand planning • Provides a real-time • Short-term demand • Enhanced demand • Increased forecast
real-time, changing features exist with order management prediction with demand management accuracy
demands in the limited ability to sense platform for sensing algorithms and process including
planning run leads or predict short-term omnichannel demand forecasts for medium to product lifecycle • Reduced demand
planning and
to outdated and demand based on management long-term demand with management and
forecasting cost
inaccurate growing number of advanced statistical product
planning demand signals • Changes in demand are forecasting methods segmentation
visible without waiting
(SAP Integrated Business capabilities
for lengthy batch
Planning) (SAP Integrated
processes. Orders are Business Planning)
prioritized and tightly • Product lifecycle
integrated with supply management tools for • Operational master
and fulfillment generating statistical data and order data
forecasts on new products integration with
(SAP Integrated Business transactional system
Planning) (SAP Integrated
Business Planning)
• Remote capture and
analysis of sensor data
from connected devices,
feeding to demand
management process (SAP
Connected Goods)

• Difficult to drive • Collaboration around a • Provides an integrated • Rapid and collaborative • Workflow and • Reduced overall
Sales and sales and operations SAP HANA platform to S&OP, including “what if” and approval process as supply chain
Operations plan needs separate support demand-driven scenario planning of different part of the sales and planning cost
Planning (S&OP) integration; difficult to business planning potential business plans, to operations process
allow business stakeholders • Reduced sales and
process with analyze different processes, including (SAP Integrated
and functional leaders to operations
executional ERP scenarios of future real-time analytics Business Planning)
system, which demand and supply across demand, supply, agree on and execute desired planning cycle
path forward (SAP Integrated time
causes planning to and hard to come up and finance
be done in a slow, with actionable plan Business Planning)
manual process
with inconsistent
information across
(continued next page)
functional areas

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 12

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Business Planning Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
capabilities

• Long batch run • Planning runs at • Accelerated MRP: • Supply planning beyond • Improved usability with • Reduced overall
processes lead to predefined times improved effectiveness MRP in conjunction with new MRP planning supply chain
inefficient planning without real-time data of planning, up to 10x S&OP to provide board and (near) real- planning cost
faster, enabling more unconstrained or time integration with
• Manual resolution • MRP lists are working constrained (optimized) SAP Integrated • Improved
frequent MRP runs –
on material with snapshots of the supply plans Business Planning manufacturing
multiple times a day
bottlenecks, heavy planning situation (SAP Integrated Business function planning
use of side by side during the planning run • (Live) MRP: one single Planning) efficiency
tools to simulate harmonized MRP
• Reduced revenue
process for all • Rapid and collaborative
• Inability to include materials, both S&OP, including “what if” loss due to stock-
the real-time and scenario planning outs
unconstrained and
changing demands (SAP Integrated Business
those requiring • Improved
in the planning run advanced constraint- Planning)
and analysis leads manufacturing
based planning function planning
to outdated and
efficiency
inaccurate • MRP (cockpit) provides
planning decisions real-time insights into
material availability

• Inability to support • Forecast is generated • Directly share forecast and • Reduce revenue
demand driven in a separate system orders generated by SAP loss due to
supply chain. and there is no direct IBP (Integrated Business fulfillment issues
Individual and siloed communication to the Planning) with suppliers
• Reduced overall
solutions for suppliers on the same via Ariba Supply Chain
supply chain
demand generation Collaboration (SCC)
and supplier solutions planning cost
collaboration leads
to inefficient supply
chain processes

(continued next page)

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 13

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Business Planning Deep Dive

TYPICAL PAIN Current State with ERP SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS on Traditional Capabilities SAP Leonardo Solution Innovations Benefits
Database Capabilities

• Too much working • Difficult to • Personalized and • Determination of optimal • Uncertainty index and • Reduced
capital in the determine dynamic planning of inventory targets across expected service-level days in
supply chain optimal inventory replenishments with multiple echelons of raw calculation for inventory
leading to low targets across Demand Driven material, work in process, inventory optimization
• Increased
inventory turns the supply chain, Material Requirement and finished goods (SAP Integrated
inventory accuracy
and, at times, so companies are Planning (DDMRP), inventory, enabling supply Business Planning)
subpar customer left with having to which is fully integrated chain to operate with less
• Demand driven
service levels estimate these into existing MRP working capital while
replenishment: Time
manually concept maintaining target service
• Whiplash effect in levels dependent buffer
which forecast • Replenish only for real levels, Buffer
(SAP Integrated Business
yield supply chain demand and introduce monitoring in planning
Planning)
inefficiencies buffers at strategically and execution
important points
• Difficult to predict
(DDMRP)
individual
consumer • Real-time analytics
demand and across all data held in
supply the same, SAP S/4HANA,
without increasing covering orders,
the stock invoices, inventory, and
costing information

• Lack of visibility into • Supply chain • Embedded • Empowers business users • Enhanced process • Improved supply
the end-to-end supply analytics possible analytics allow on- to perform ad hoc analysis visualization, chain planning FTE
chain leads to poor using an online the-fly simulations in real time with alerts, automation, and productivity
decision support and analytical with real-time KPIs, reporting, and collaboration,
• Reduced overall
slow corrective processing (OLAP) data; user- and insights that detect and including work flow
supply chain
actions engine like business use-case-centric notify users of potential and approval process
warehouse (BW); views are also disruptions (SAP planning cost
• Collaborative planning
the data is not real supported Integrated Business
on the network with
time Planning)
SAP Integrated
Business Planning and
the
Ariba® Network

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 14

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Logistics & Order Fulfillment Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Missing visibility • Visibility on overall • Single warehousing • SAP EWM deployed • Improved user • Reduced
and control of progress across platform for all as a stand-alone experience with new total
material system boundaries; warehousing operations, application for high- SAP Fiori apps related to logistics
movements ability to achieve including optimization, volume and highly – task confirming, cost
across the automation, and labor
overview on material automated inventory counting,
network management. This is
flows messaging enabled by SAP Extended warehouses outbound packing and • Reduced
interface between ERP Warehouse Management e-commerce returns warehouse
• Batch-based
and extended (EWM) embedded in the operating
processes and • Advanced QM
warehouse SAP S/4HANA core cost
lack of real-time Integration
management
monitoring result • Additional embedded • Increased
application • Mapping the entire
in poor on-time inventory accuracy
analytics for EWM in the
delivery warehouse complex in
• Limited wave area of labor • Reduced order
performance detail in the system, down
management and management reporting fulfillment lead time
to storage bin level with
warehouse real time visibility of labor, • Improved integration to • Reduced TCO
• IT complexity with
optimization resources and activities, inventory management through
the need to
capabilities using warehouse monitor related to customer- landscape
maintain
interfaces owned stock and simplification
• Limited capabilities in • One system (master data, separation of storage
the area of cross customizing, and UX) for location assignments
• Data duplication
docking, labor reduced data
due to separate • Comprehensive
management, quality redundancy, lean
warehousing processes with fewer integration of item
management
systems, adding business documents, and unique identification
to complexity overall simplification data and ammunition
• No standard UI
management in the area
capabilities for end to • New and improved FIORI of defense
end user experience apps available for
warehousing clerks • Stock in Transit:
Mitigate production
risks by forecasting
stock in transit delays

(continued next page)

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 15

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Logistics & Order Fulfillment Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Lack of accurate • Inventory status is • Live inventory • Catch Weight • Enhancements for • Reduced
up-to-date calculated overnight management through Management (CWM) predictive analytics in supply and
inventory data, redesigned data model and Direct Store process monitoring for inventory
lead times, and • Live inventory updates
enables unlimited Delivery ( DSD) decision support planning cost
procurement are not available; functionalities for the
simultaneous material • Improvements in
timings for the inventory status is customers • Increased inventory
planning leads to movements and allows for goods receipt process
reflected in the system accuracy
an inefficient with time offset true transparency on and usability through
inventory and material posting of goods • Reduced days in
planning
process • Inventory throughput may flows receipts without inventory
reach boundaries reference
• Low inventory depending on business • Ability to change lot size to
throughput “one,” thus capturing the • Process enablement
scenario
prevents live lowest level of granularity in for further Catch
inventory inventory stock keeping Weight Management
updates (CWM) scenarios
• Decreased stock buffers
due to better transparency
and insights

• Availability of goods receipt

including stock in transit
and goods receipt of
blocked stock

(continued next page)

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 16

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Logistics & Order Fulfillment Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Complexity in • Material ledger activation • Material ledger • Increased

valuating available along with available as a default inventory
inventories in functionality of actual option. All inventory accuracy
multiple costing. However, valuation data exists
• Increased visibility
currencies and inventory valuation data in material ledger, in actual
for different exists in multiple removing profitability,
valuation aggregated tables, which redundancies and allowing for margin
methods (legal/ leads to slow processes aggregates optimization
profit (actual costing,
• Faster actual costing
center/reportin redistribution/
due to optimized code
g purposes) revaluation) and
based on SAP HANA;
slow/inefficient reporting faster reporting as
needed for actual
costing; multiple
currency and multiple
valuationmethods

• Limited • Inventory analysis is • SAP Fiori apps for • New analytical apps for • Increased
inventory possible through a inventory managers warehouse clerks and inventory
visibility, separate analytical and warehouse clerks inventory managers accuracy
increasing error system with data • Reduced supply
rate, and supply integration issues and • Optimization of • Overview page to
and inventory
shortages data latency inventory and material support the inventory
planning cost
flows with analytical analyst in daily
apps, to include business by presenting
inventory turnover
selected and relevant
analysis and flow
analysis KPIs and charts at a
glance
• Inventory KPI analysis
with follow-up actions
on slow- moving
materials

(continued next page)

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 17

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Logistics & Order Fulfillment Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Managing • Limited optimization • Single platform for • The SAP Transportation • Advanced driver • Reduced total
increasingly possibilities transportation Management (SAP TM) planning logistics cost
complex, multi - No planning combining management with deployed as a stand-
• Integration to • Reduced
modal, global inbound and outbound basic and advanced alone application for global track and transportation
transportation movements shipping functionality complex transportation
trace management costs
needs in a single - Planning based on and real-time requirements
platform deliveries embedded analytics. • Estimated Time • Increased inventory
- No transportation This is enabled by SAP of Arrival (ETA) accuracy
• Manual capacity planning Transportation • Insights into calculation
• Reduced order
transportation Management (TM) transportation based on actual fulfillment lead time
process taking • No comprehensive freight embedded in the execution, timely data
execution of critical • Reduced TCO
place in agreement management SAP S/4HANA core • Collaboration
business processes through landscape
disparate and settlement through logistics
and tracking goods and simplification
systems with capabilities with • Transportation business
inefficient customers and suppliers solution covering end assets in transit network
business partner to end processes - (SAP Global track and
• Migration tools
collaboration • Limited tendering capacity
Trace) for SAP TM to
capabilities management,
SAP S/4HANA
• Lack of end to planning, collaboration
for TM
end visibility with • No out of the box event execution, • Collect, map, store,
electronic track tracking capabilities transportation charge and analyze vehicle and
and trace management and sensor data in real
capabilities settlement in one time, optimizing
system logistics and improving
• No holistic services
optimization of • Address requirements
(SAP Vehicle Insights)
inbound, of multiple industries
outbound and and modes
intracompany
freight • Accurate
transportation costing
for improved invoice
accuracy

(continued next page)

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 18

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Logistics & Order Fulfillment Deep Dive

TYPICAL PAIN Current State with ERP SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS on Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Logistics processes • Embedded Logistics
done in disparate Execution –
systems without Warehouse
comprehensive Management (LE-
integration into core
WM) and Logistics
business processes
Execution –
Transportation
• IT complexity with management (LE-
the need to build
TRA) components
multiple interfaces only offer limited
functionality with
• Analytics and need to setup
reporting done in a multiple Interfaces
separate business with business suite
warehousing system applications
with no real time data
update • Reporting based on
Business
Warehousing (BW)
• Lack of visibility and
content using
automation in yard
Business Intelligence
management (BI) reporting tools
processes leading to with time lag from
inefficiencies transaction system
• Visibility into the location
and condition of goods
and assets along the
supply chain
• Process transparency
and collaboration with
the partners to identify
and address issues with
in-transit tracking
• Valuable insights to make
focused decisions to
lower costs and optimize
inventory levels
• Enable collaboration with • Unplanned • Improve on-time
logistics partners to improve returns process delivery
throughput, reduce wait triggered from performance
times, and increase SAP Extended
• Reduce days in
efficiencies (SAP Global Track Warehouse
inventory
and Trace) Management
(EWM) • Improve customer
• Full visibility into the lifecycle satisfaction
• Analytics for
of serialized products and
tracking products across delivery • Reduce total
performance logistics cost
multiple systems (SAP Global
Track and Trace) • Intuitive forward • Reduce operations
navigation in cost (Services)
• Efficient management of yard order to achieve
activities such as managing routine and
stock, locations and vehicles exceptional task
(SAP Yard Logistics)
• Collect, map, store, and
analyze vehicle and sensor
data in real time, optimizing
logistics and improving
services ( SAP Vehicle
Insights)

• Limited transparency
in multi tiered global
supply chain
network, with
multiple business
partners

(continued next page)

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 19

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Logistics & Order Fulfillment Deep Dive

TYPICAL PAIN Current State with ERP on SAP S/4HANA Cloud/ LoB and 2018 Planned Business
POINTS Traditional Database Capabilities SAP Leonardo Solution Innovations Benefits
Capabilities

• Inability to • Global ATP checks in a • Mass product availability • Response planning • Display and analyze • Reduction in
promise different planning check for sales, planned capability for midterm confirmation situation revenue loss due
accurate and system and production orders. allocation planning and of requirements and to fulfillment
reliable order Advanced ATP check short-term order product allocation issues
• Low-volume back-
dates leads to and performance confirmation in order to availability situation
order processing • Reduction in
customer improvements for automate allocation
dissatisfaction supported releasing large procedures , take effective • Trigger an alternate cancellations of
backorder processing back-ordered
and revenue production orders corrective action and
run automatically when items
loss respond rapidly
• Multichannel allocation (SAP Integrated Business an exception occurs
• Inefficient management using
Planning) • Alternative-based
strategies or demand characteristics
confirmation:
manual to allocate and reserve
processes to short supply. Real-time automatically
determine the best
manage orders order confirmation
possible plant to fulfill a
and allocations considering allocation
lead to revenue constraints requirement
loss and
• Back-order processing
fulfillment
issues with intuitive selection
and ranking of demand
• Inability to to establish order
select priorities. Rescheduling
alternative order confirmations
sources interactively to manage
intelligently variability through out
impacts the day
profitability
• Improved user
targets
productivity with
SAP Fiori apps including:
back-order processing
setup and result monitor
and last-minute changes
before release for
delivery

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 20

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Digital Priorities in Supply Chain

Major shifts in the economy are accelerating the transformation to a Digital Supply Chain. These evolved supply chains are more connected, intelligent,
responsive, and predictive. Below are few digital priorities that will help companies to capture the opportunities and remain competitive.

Customer Experience Local Manufacturing

Customer expectations are changing and individualized products
are becoming commonplace. It’s not about selling the product
but caring about the customer from the beginning through the
entire lifecycle. Ability to deliver the same day, or even the same
hour to different types of locations is the key to a great customer
experience.
Companies are moving “closer to home” and reducing outsourced
manufacturing with the preference of local manufacturing. To make
manufacturing processes more efficient and affordable there is an
increase in automation and robotics on the production floor. Also,
the assets and products are becoming more connected and smarter .

SAP Connected Goods software captures information from smart SAP S/4HANA supports agile manufacturing with ‘lot size of one’
products using IoT sensors. SAP S/4HANA supports the new and 3D Printing customization capabilities, which reduces
consumption-based business models, leading to increased inventory carrying costs. SAP solutions provide better visibility into
revenue for the organization. the performance of the shop floor equipment to increase uptime
and utilization.

Networked Economy Changing Society

The new economy is the networked economy. Organizations are
seeking cross department and cross industry business network
collaboration. Also, visibility down multiple levels of a supply
chain is needed for sustainable and socially responsible
networks.
SAP Integrated Business Planning and SAP Ariba solutions
provide collaboration across supply chain, logistics, assets, and
manufacturing. IoT solutions from SAP leverage data from smart
assets to drive data and business processes. Also, improved
collaboration in design results in improved compliance and
sustainable products.
An increasing percentage of the world’s population now lives in
cities and urban areas. This increases the pressure on infrastructures
such as electricity, water, and power grids and thus the need to
optimize space and logistics. Also, as manufacturing becomes more
automated, the role of employees and the skills required are also
evolving.
IoT solutions from SAP help build smart cities and optimize the rural
areas to support the ever-growing population with the ever-decreasing
natural resources. SAP Leonardo capabilities help data scientists
analyze vast amounts of data and provide innovative solutions in this
time of changing work environments and populations.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 21

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

SAP’s Value Proposition for Supply Chain

STRATEGYENABLEMENT BUSINESS BENEFITS*

• Run Simple (master complexity): adapt to market • 12–15% reduction in days of inventory
opportunities and develop newchannels • 10–15% reduction in revenue
• Integrate planning and execution across strategic, loss due to stock-outs
tactical, and operational time horizons • 10–15% reduction in total logistics cost
 5–10% reduction in supply chain planning
Strategy Business cost
Enablement Benefits
 Reduction in order fulfillment lead time

Risk Employee
RISK MANAGEMENT Management Engagement EMPLOYEE ENGAGEMENT

• Plan risk as part of a structured, • Enhances supply chain planning productivity

collaborative, integrated business through easy-to-use Microsoft Excel and
planning process analytics-based planning interface
• Accelerate planning and response cycle times, moving from • Helps production and material planners execute
monthly, to weekly, to daily decision processes critical daily tasks with embedded decision
• Adopt short-term demand sensing and supply support analytics and the role-based SAP Fiori
replanning to respond to variability user experience
• Increases throughput

*Benefits are based on early adopters of SAP or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA, Cloud/ LoB
applications and SAP Leonardo solutions. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value
proposition for your enterprise.

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 22

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Customers are Achieving Value from SAP

PRESTIGE BRANDS HOLDINGS Inc. Company
Prestige Brands
• Decreased time for report generation from 2 days to minutes Holdings Inc.
• Reduced time for sales quota planning from 4 weeks to 3 hours Industry
Consumer Products
• Achieved greater acceptance, trust, and compliance across all
organizational units
SAP Solution
Prestige Brands focuses on product innovation in the over-the- SAP Integrated Business
counter healthcare and household products, It implemented Planning
SAP Integrated Business Planning Solution to support account
planning. The centralized tool provided what-if scenario analysis Customer Web Site
to evaluate different plans with visibility into immediate impact www.prestigebrands.com
on customer service and working capital investments

Click here for Prestige Brands Holding Inc. source reference

LOHIYA GROUP
Company
• 100% Visibility of inventory across all locations
Lohiya Group
• 70% Less time spent on decision making
Industry
• 60% Faster transaction processing time
Consumer Products
Lohiya Group offers a range of products for consumption for the
domestic and commercial sectors throughout India. It
SAP Solution
implemented SAP S/4HANA to automate freight determination SAP S/4HANA
based on customer region from point of delivery, as well as to
track orders and pricing. The company also expects to eliminate
the need for reconciliation between warehouse and accounts, CustomerWeb Site
www.lohiyagroup.in
thanks to fully integrated inventory and accounting transactions.

Click here for Lohiya Group source reference

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 23

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Customers are Achieving Value from SAP

FARMA-TEK Company
• 3-day Order fulfillment, down from 8 days
Farma-tek

• 40% Reduction of capital tied up in stock

• 40% Reduction in waste due to FEFO (First Expired-First Out) Industry

methodology Pharmaceutical

Farma-Tek, a pharmaceutical company based in SAP Solution

Istabnul, aspires to introduce new products to SAP S/4HANA
healthcare professionals. SAP S/4HANA runs all of the
company’s business processes on a single platform. Customer Web Site
Real-time insight suppots Farma-Tek in predicting the www.farma-tek.com
flow of materials to produce the right products at the
right time. It also assists the company in regulatory
compliance tracking – an imperative in this industry

Click here for Farma-tek source reference

GULFTAINER COMPANY LIMITED Company

Gulftainer
• Improved operational efficiency

• Agile solution to support enterprise mobility and on-the-go business Industry

Travel and transportation
• Scalable foundation to support future growth

Gulftainer is a privately owned, independent port management SAP Solution

and 3PL logistics company based in United Arab Emirates SAP S/4HANA
(UAE). SAP S/4HANA is expected to enable a more efficient,
cost-effective movement of international business through their Customer Web site
terminals, providing the actionable data necessary to increase www.gulftainer.com
productivity and reduce costs
Click here for Gulftainer source reference

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 24

 Overview | E to E | Process Deep Dive | Digital Priorities | Value Proposition Summary | Customer References | Appendix

Your Path to Digital Transformation

Every enterprise is unique, with different starting points and end points. Whether you are starting as a net-new implementation or undergoing a digital transformation in
an existing SAP landscape, SAP can help. We have been working with enterprises of all sizes and ¡n all industries. Based on the depth of this experience, SAP has a
robust portfolio of services

Customer Engagement Methodology Innovate with SAP Leonardo

No matter which path applies to your enterprise, SAP has a structured four- SAP Leonardo is SAP’s digital innovation system that makes it easy to
phase approach to ensure success – executive alignment, value discovery, innovate with new technologies, integrate them into your business, and
validation and executive readiness, and value delivery. scale seamlessly as your company grows.
Get started today with SAP Leonardo

For more details, please see the brochure: Explore SAP Leonardo capabilities
Driving Value in a Digital Economy
Learn more about SAP Leonardo capabilities – and see how customers in a
SAP Value Assurance Service Packages variety of industries are using the system to realize the promise of new
technologies, such as the IoT and Big Data analytics.
Take advantage of SAP Value Assurance service packages for SAP
S/4HANA to quickly and safely harness the power of next-generation For more details, please see the e-book:
software and in-memory processing. Leonardo customer stories

For all value assurance packages and for the successful and seamless
Get an Expert Take on Digital Transformation
transition to SAP S/4HANA, please visit the link:
Transition to SAP S/4HANA. What are the benefits of blockchain, machine learning, and other
transformational technologies – and how are they impacting business?
SAP S/4HANA Road Map Get answers from experts and analysts in this e-book

With a three-year detailed road map, SAP gives customers the transparency
to accelerate their transition to an SAP S/4HANA landscape. Assess Your Supply Chain Digital Maturity
SAP S/4HANA Road Map.
Want to understand your Supply Chain digital maturity?
Click here to participate and see how you compare to peers in real time.
Start Today with a Trial
SAP S/4HANA Trials Lay the Foundation for an In-depth Digital Transformation Engagement

Get clear guidance on SAP S/4HANA centric product map through a free
Key Assets for Next Steps on SAP S/4HANA self-service for customers and partners.
www.sap.com/s4next www.sap.com/TransformationNavigator

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 25

© 2018 SAP SE or an SAP affiliate company. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate
company.

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or
an SAP affiliate company) in Germany and other countries. Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark
for additional trademark information and notices.
Some software products marketed by SAP SE and its distributors contain proprietary software components of other
software vendors. National product specifications may vary.

These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP
SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company
products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein
should be construed as constituting an additional warranty.

In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or
to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and
possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its
affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver
any material, code, or functionality. All forward- looking statements are subject to various risks and uncertainties that could cause actual results to differ
materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates,
and they should not be relied upon in making purchasing decisions.