Danisco A/S

Danisco:
SAP Best
Practices

SAPPHIRE DK
26 April 2005

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 1

 Agenda
Danisco A/S

Presentation of Danisco
IT strategy - ERP strategy & vision
Business scenario
"Project Mindstorm" - using SAP building blocks

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 2

 Leading supplier to the
global food industry – an example
Danisco A/S

Danisco is part of:

• half of all ice cream

• every fourth loaf of bread
consumed in the world

Chocolate-coated ice cream may contain the following

Danisco ingredients:
• sugar
• sweeteners
• flavours
• emulsifiers
• stabilisers
• functional systems

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 Global presence
Danisco A/S

Canada UK Estonia Russia

Scarborough  Wellingborough  Tallinn  Moscow 
USA Beaminster  Iceland *Moscow 
Madison  Redhill  Reykjavik  Poland
New Century, KS  *Stockport  Lithuania Olsztyn 
St. Louis, MI  Netherlands Kedainiai  Poznan 
St. Joseph, MI  Zaandam  Panevézys  Czech Republic
Thomson, IL  An Uden  Finland Smirice 
Terre Haute, IN  Barendrecht  Espoo  Austria
Pine Brook, NJ  *AE Leiden  Kantvik  Vienna 
Ardsley, NY  Belgium Kotka  Lenzing 
Lakeland, FL  Louvain-La-Neuve  Salo  Croatia
*Palo Alto, CA  *Brugge  Säkylä  Zagreb 
*Cedar Rapids, Iowa  France Jokioinen  Serbia and Montenegro
*Rochester, NY  Aubervilliers  *Hanko  Belgrade  China
*Beloit, WI  Dangé Saint Romain  *Jämsänkoski  Hungary Beijing 
Guatemala Èpernon  Sweden Budapest  Shanghai 
Guatemala City  Melle  Norrköping  Romania Kunshan 
Mexico Sassenage  Arlöv  Bucharet  Guangzhou 
México City  Vinay  Köpingebro  Ukraine Nanyang 
Tecomán  Paris  Örtofta  Kiev  *Shanghai 
Colombia Grasse  Norway *Beijing 
Santafé de Bogota  Landerneau  Bryne  *Wuxi 
Brazil Seillans  Oslo  Korea
Paulinia  *Roncq  Denmark Seoul 
São Paulo  Spain Brabrand  India Japan
São Paulo  Valencia  Copenhagen  Haryana  Osaka 
Pirapozinho  Viladecans  Grindsted  Malysia Tokyo 
*Cotia  Italy Haderslev  Penang  *Tokyo 
Chile Milan  Kuala Lumpur 
Holeby 
* Genencor Santiago  Portugal Assens 
Singapore
Pargua  Faro  Singapore 
Nakskov 
Argentina Germany *Singapore  Australia
 Sales office Nykøbing 
Buenos Aires  Niebüll  South Africa Sydney 
 Innovation centre *Arroyito  Anklam  Johannesburg  New Zealand
*Buenos Aires  *Pattensen  Cape Town  Auckland 
 Production plant
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 Transformation 1999-2005
Danisco A/S

• Net sales /
• Conglomerate • Net sales: DKK 19bn
employee: DKK 1.3m
• 11 divisions • EBITA: DKK 2.1bn
• EBITA /
• Process-oriented • EBITA margin: 11%
1999
employee: DKK 0.14m

Transaction value: approx. DKK 25 bn

2005
• Focus on Ingredients Net sales: DKK 18,0bnE Net sales /
employee: DKK 1.9m
• Knowledge based EBITA: DKK 2.3bnE
EBITA /
• Proactive EBITA -margin: 13%E employee: DKK 0.3m

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 Market position
Danisco A/S

Textural ingredients
Functional systems

Industrial enzymes

Bio-preservation
Starter cultures
Feed enzymes
Food enzymes

Sweeteners
Flavourings
Emulsifiers
Danisco (DK) 9 9 9 9 9 9 9 9 9 9
9 9 9 9 9 9
Degussa (D)
Kerry/Quest (GB) 9 9 9 9 9 9 9

Rhodia (F) 9 9 9 9 9 9
CP Kelco/Huber (DK/USA) 9
Grünau/Cognis (D) 9 9
Novozymes (DK) 9 9 9
Chr. Hansen (DK) 9 9 9
DSM (NL) 9 9 9 9 9 9 9
IFF (USA) 9
Givaudan (CH)
9
Symrise (H&R/Dragoco) (D)
9

Danisco's position 1 1 2 8 2 3 2 2 1 1

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 Danisco A/S

Mission Vision Strategy

To accommodate Danisco wants to be the Danisco's strategy is

consumer demand for leading supplier of to expand through:
healthy, safe and tasty ingredients to the global
food food industry ƒ organic growth
ƒ acquisitions
ƒ research and development

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 7

 Danisco A/S

Global Leading/Profitable Growth/Acquisitions

Danisco has Global Danisco will optimize cost Well-defined IT setup
Customers, served by structure also by optimizing (clear strategy)
Divisions, Production along these global business
Sites, Sales Regions, processes Fast track infrastructure
Shared Functions etc… migration capability
To provide the notion of
being served by One Immediately setup plan for
Danisco, Danisco has aligning acquired companies
decided to implement to Danisco's Global Business
Global Business Processes and migration to
Processes the supporting systems

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 Global Business Processes
Danisco A/S

Alf Duch-Petersen, CEO:

"Danisco's Executive Board has agreed

upon a set of best practice business
processes, which we want to roll out globally
in order for us to be sharing information and
best practices across our company. By
sharing these processes we will support our
vision and values and facilitate continuous
global process optimisation."

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 9

 Business objectives
Danisco A/S

Vision - Strategy - Values

• Global
• Leading
• Business to Business
• Growth: organic and through acquisitions
• Profitability
• Close customer interaction
• Employee skills, learn, knowledge sharing
• Innovation
• Sustainability

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 10

The ERP template
Danisco A/S

To support global business processes and business process interaction with customers and
suppliers, Danisco has defined a strategic predefined ERP-template, based on software
from SAP. Danisco will work dedicatedly to implement this solution in all business units
globally.

This solution covers the following business processes:

Purchase to Pay
Demand to Supply
Customer to Cash
Financial Management & Corporate Banking
Quality Management
Human Resource Management
 SAP system
Danisco - a process industry
Danisco A/S

Ingredients SAP System - Main Processes

Profitability
Analysis
Product
Costing
Planning Detailed
QM SOP Planning QM QM QM COA

Sales MRP Planned Process Process Customer

Delivery Billing Payment
Order Run Order Order Order

QM QM
Logistics

Goods Goods Goods Goods Goods Sales budgetting

QM Issue Receipt Issue Receipt Issue
Warehouse

Purchase
Raw Semi - F. Finished Sales

Requisition Quality
Goods
Receipt Purchasing

QM Finance

Controlling
Purchase Invoice Vendor
Order Receipt Payment

SAP Modules
SD, MM, PP, QM, PM, FI, CO, TR, AM, HR, WF, TM, PS
Business Warehouse
E-commerce (ITS)
# Users 2000+ / 8 Company codes
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ERP
The roll-out programme
Danisco A/S

NOW End 2006

Process/Template
Development

Global Roll-Out

Business Optimization and

Process Optimization

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 Danisco Ingredient template history …
Danisco A/S

… success proven !
2002 2003 2004 2005 2006
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Template development 1.10.2000 – 4.3.2002

HR Masterdata &
Niebüll / Tønder Payroll DK

Brazil
Group into
Template
Template
consolidate

UK

Madison,
US

France

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 SAP roll-out plan
Marts 2005
Danisco A/S

SAP-Template 2004 2005 2006

Roll-out Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
SRM SWE U
Dolphin HR ITA P USW
One-system IND G SWAUT
Flavour Ph.1 Flavour Phase 2 *1 A FIN
Normal HR MasterData D
Cultures ph1 (US) NAM Ph.2 *2 NAM Ph.3 *3 Mexico
Cultures ph2 (EUR) & TI = 9 site /*4 E
DAN *7

development TI Ph.1 *5 UKD LAN ZAC RUM

Mindstorm TI Ph.1 *6 GTG ARG POL

China Chile
Malysia
Outsouces
ANZ / NZL
Columbia Japan / Korea
Estimate # users 1095 1865 1924 2134 2.264 2.689 2.960 3.155 3.265 3.705
*1 : Louvain-La-Neuve, Grasse
*2 : Kansas, St. Joseph, Canada + Warehouses Pinebrook & Bakersfield
*3 : St. Louis, Lakeland
*4 : Dange, Vinay, Sassenage, Epernon, Melle, Paris
*5 : Faro, Valencia, Barcelona
*6 : Smirice & Zandamm
*7 : Marlborough, Kantvik, Singapore, Vaasa, Naantali
SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 15
The Danisco way of implementing SAP R/3
Danisco A/S

Months
-2 -1 1 2 3 4 5 6 +1
Preparation

• Scope definition
Business Blueprint
• Site readiness
• Site mgmt. meeting • Mgmt. interviews Realization
• Process intro/site visit • Template training
Final
• Master data • SAP configuration
• Legal requirement Preparation
• Business Blueprint • Master data test load
Go-Live
• Define Org. structure • Integration test • End-User training
& Support
• Prepare end-user training • Master data load
• Mgmt. Acceptance test • Post impl.
Kick-off support
• Cut-Over
Review scope • Hand over
to support
Go-live
SCM SCM SCM SCM SCM
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 SAP global rollout
Objectives
Danisco A/S

• Integration
• Business process harmonization
• Master data harmonization
• Cross company supply chain
• Common reporting platform
• Inter-company trading
• Harmonized costing and accounting principles
• Continuous global business improvement

- SAP enabled

a change program
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 Project Mindstorm
Danisco A/S

Deve
lopm
ent p
r oject
m p late
t orm te
Mind s

Creativity

i l i ty
b
Sc ala Si
m
Flexib pl
ility ic
ity

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 18

 Issues / Challenges
Danisco A/S

• Cost reduction The Danisco way of implementing SAP R/3

Months
• Reduction of implementation time -2 -1 1 2 3 4 5 6 +1
Preparation

• Scope definition Business Blueprint

• Many roll-outs • Site readiness

• Site mgmt. meeting • Mgmt. interviews Realization

• Process intro/site visit • Template training Final

• SAP configuration Preparation
• Master data • Legal requirement
• Master data test load
• Roll-outs to small and medium sites • Business Blueprint
• Define Org. structure
• Integration test
• End-User training
• Master data load
Go-
Go-Live
& Support

• Prepare end-user training

• Post impl.
Kick-off • Mgmt. Acceptance test
support
Review scope • Cut-Over
• Hand over

• More acquisitions Go-live to support

SCM SCM SCM SCM SCM

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 19

 SAP vision – for smaller companies
Danisco A/S

Danisco's SAP implementations and the use of SAP

in smaller companies must be perceived as
Simple And Powerful

In line with ”we believe in dialogue” we must establish

roll-outs that are:

• Flexible
• Standardised
• Scaleable

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 20

 Solution approach
Danisco A/S

Business one and Microsoft Business solutions was no option

SAP Best Practice solutions

• Best process fit

• Coexistence with the existing template

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 21

SAP best practice
Scalability and focus
Danisco A/S

P36

P16 P17 P39

P06 P14 P15 P38

P09
P21 P25
P12 P13
P04 P03 P19
P40 P24

P02 P22
P37 P18 P32 P33

P07 P20
P08 P34

B26 B10 B29 B27 B28 P30 B30 P31 P29 P28

Business needs are covered by choosing relevant building blocks

SAP best practice
Solid solutions
Danisco A/S
 Benefits
Danisco A/S

• Lower cost implementations

• Lower resource consumption
• Reduced implementation time
• Securing our templates by focusing on standard
SAP processes
• Scaleable and transparent processes across
divisions, countries and sites
• Quicker and easier evaluation of new SAP
functionalities
• Building the Danisco building block library for
knowledge sharing
• Best practices is a good starting point for kick
starting the use of mySAP components

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 24

 Development activities
Danisco A/S

• Establishing the BC set based Danisco template

• Securing coexistence with the existing template
• Defining scope of Solution Packages for the
SMB sites
• Making state of the art documentation based
on best practice
• Making process overview at transaction level

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 25

 Mindstorm Template development
Danisco A/S

Best Practice One system / one client Building Block

processes development

Localisation

Needs covered by Danisco Ingredients

Processes
Building Mindstorm
Block template
selection

Adapting
Best Practice
Building Blocks

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 26

 Process overview
Danisco A/S

80%
Accounts Return
Return &
&
Customer Accounts
Customer to
to Cash
Cash Pre-sales
Pre-sales Sales
Sales Sourcing
Sourcing Distribution
Distribution Billing
Billing Receivable Complaints
Receivable Complaints

85%
Demand Sales Long
Long Term Demand Detailed
Detailed Scheduling/ Process
Demand to
to Supply
Supply Sales
Forecast/SOP
Term
Planning
Demand MRP
MRP Capacity
Scheduling/ Process
Forecast/SOP Planning Management
Management Capacity Planning
Planning Manufacturing
Manufacturing

95%
Requirements
Requirements Goods Invoice Accounts
Purchase
Purchase to
to Pay
Pay Sourcing
Sourcing Procurement Goods Invoice Accounts
Determination Procurement Receipt Verification Payable
Determination Receipt Verification Payable

90%
Financial
Financial Management
Management
75%
Quality
Quality Management
Management

Best Practice Chemical process coverage compared to DiBiS template

 SAP best practice concept
Danisco A/S

SAP Best Practices – Layer Concept

Danisco Expertise
Danisco

Industry-specifics Industry-solution

Industry
Content

Encapsulated country core layer (can be activated independently)

Country
Localization ANZ CN CH D E UK US …

Preconfigured content for integrated scenarios

International core layer
Cost/Profit Production
Baseline Org.
Center Planning and
Sales Quality
Structure &Distribution Management
Package Accounting Control

Customer
Financial Human Project Materials
Service/Plant
Accounting Resources System Management
Maintenance

© SAP AG 2004, SAP Best Practices for Pharmaceuticals, Dr. Deniz Özbilen, 20

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 SAP best practice roll-out combinations
Danisco A/S

Company type Solution Package

MM: Q10, Q16 SD: Q82

Sales and light purchase
FI/CO: B29 Q70

MM: Q80, SD: Q82 QM: Q40, Q43

Sales and Purchase to Stock
FI/CO: B29 Q70, Q75-76

MM: Q80, PP: J65 SD: Q82 QM: Q40-43

Sales, Purchase and ’ligth’ production
FI/CO: B29 Q70, Q75-77

MM: Q80, PP Q81 SD: Q82 QM:40-43

Sales, Purchase and production
FI/CO: B29, Q75-79

MM: Q80, PP Q81 SD: Q30, Q33-36

Production and internal sales
QM:40-43 FI/CO: B29, Q75-79

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 29

 Mindstorm implementation methodology

Danisco A/S

Weeks
-2 -1 1 2 6 10 14 18 +4
Preparation

• Scope definition Business Blueprint

• Site readiness
• Site mgmt. meeting • Workshop Realization

• Process intro/site visit • Process overview Final

• SAP configuration Preparation
• Master data • SAP
presentation • Master data test load
Go-
Go-Live
• Business Blueprint • End-User training
• Integration test & Support
•Fit /gap
• Define Org. structure • Master data load
• Legal • Prepare end-user training
• Post impl.
requirement • Mgmt. Acceptance test
support
• Cut-Over
• Hand over
Kick-off Review scope Go-live to support
SCM SCM SCM SCM SCM
SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 30
 Project status
Danisco A/S

• The preparation phase took longer than expected

due to change management issues

• The development phase took longer than expected

due too lack of internal resources being busy with
roll outs

• The 14 days Solution Package identification period

was a success
• No vital gaps was identified
• Alternative solution was always presented

• The development cost is approximately 0,35 mill €

• The implementation cost is approximately 0,25 to

0,35 mill €

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 31

 Implementation issues
Danisco A/S

• No rocket science - easy knowledge sharing

• 100 no, but 3 possible alternatives given is

worth 0,8 mill €

• No pleasure consultancy consultants are welcome

• A template, that are scaleable and flexible

- keep your head cool

• 2 consultants one logistics and one financial

• Support by strong application competencies

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 32

 Lessons learned
Danisco A/S

• Focus at process level during the whole

implementation period
• Focus at detail level when interacting with the
existing template
• Educate and train your own SMB consultants
• Establishing your BC sets template requires
good consultants
• Make a stand - trust your Best Practice solution
• The Best Practice solution is too good :o)
• Don't underestimate the change management
issues

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 33

Implementation - "the Mindstorm way"
Summary
Danisco A/S

• Based on SAP Best Practice

• An adequate (need to have) solution and not a complete solution

• The building block concept can ensure easy, flexible and

uncomplicated implementation

• Standard processes = fewer implementation consultants needed =

low cost implementation

• Simple standard processes

• Requirement:

• Readiness to adapt to best practice

(except for critical business needs)

Roll-out:
2-3 consultants, 3-4 months
SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 34
 Danisco A/S

Questions
Questions …

Questions ……?

SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 35

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Reserved
Danisco A/S

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SAPPHIRE Copenhagen / P02 / Claus Hagen Nielsen / 36