Professional Documents
Culture Documents
Industry
Deepak Sharma
MD, SAPINDUS SOFTWARE PVT Ltd.
Challenges, Strategies, and Benefits
The Solution
Challenges, Strategies, and Benefits
The Solution
The Dairy Industry Ecosystem
SAP AG 2006
Dairy Companies Often Have
the Right Focus and the Right Strategies…
Improve margins
Increase Shareholder Value
Drive for lower costs
Increase Revenue and Profit Margins YOUR FOCUS
Get closer to the consumer
Increase Shareholder Value
Operational
Improve Excellence
time-to-market Increase Revenue and Profit Margins
Product Leadership
Enhance operational efficiency Cost Leadership
Improve Customer Satisfaction Product Leadership
Improve Customer Satisfaction
SAP AG 2006
…But Mostly They Lack the Ability to Execute
COMPLICATED TO OPERATE
Complex and broken process flows Business STRATEGY
Incomplete or hidden information
CHALLENGING TO CHANGE
Ability to EXECUTE
Multiple costly integration points
Redundant and inconsistent data
Market Forces
Retailer power (Wal-Mart effect)
Consumer concerns about food safety; Resulting Key Challenges
media attention
Develop new products faster
Increased legislation and regulations
around food safety by FDA and other
and more effectively
authorities (e.g., EU Dir. 178/2002, Optimize supply chain
the U.S. Bioterrorism Act of 2002)
Changing consumer demands due to Increase efficiency in
demographics and trends procurement
Shorter product life cycles
Optimize manufacturing
Extreme price pressure and margin
erosion Ensure food safety and
Restrictive consumer spending pattern regulatory compliance
Market consolidation (globalization, M&As)
Improve sales efficiency
Increasing competition
Emerging private labels
New technologies reshaping the industry
SAP AG 2006
Develop New Products Faster and More Effectively
Challenges Strategies
Adapt to ever-changing Enable collaborative
consumer tastes and engineering
requirements Consolidate product
Develop product efficiently development data and
documents
Address increased demands
for new products Reduce development effort
and time-to-market
SAP AG 2006
Optimize Supply Chain
Challenges Strategies
Decrease process costs Reduce costs
SAP AG 2006
Increase Efficiency in Procurement
Challenges Strategies
Cope with ever-changing Reduce costs
quantity and quality of the raw Streamline processes
milk
Gain more visibility and
Manage complex payment
transparency
conditions
Improve relationship with
Cope with seasonal
producers
fluctuation
Create operational efficiencies
and transparency
Track batches
SAP AG 2006
Optimize Manufacturing
Challenges Strategies
Base plans on a non- Maximize raw material
standardized raw material utilization
Define optimal product mix Increase demand planning
accuracy
Create operational efficiencies
and transparency Streamline processes
SAP AG 2006
Ensure Food Safety and Regulatory Compliance
Challenges Strategies
Align with governmental Support mid- and long-term
regulations (EU 178/2002, the company success by ensuring
U.S. Bioterrorism Act of 2002, regulatory compliance
import/export) Set efficient processes in
Enable fast, effective product place to enable traceability
recalls Allow targeted product recalls
Track and trace from “cow to to minimize costs
consumer”
SAP AG 2006
Improve Sales Efficiency
Challenges Strategies
Protect market share Obtain first-hand information
about the market
Meet increased service level
expectations of customer Optimize process settlement
in sales
Get visibility in the sales
process Increase customer service
offerings
Manage quality-based price
determination for raw material Increase customer
sales satisfaction
SAP AG 2006
Challenges, Strategies, and Benefits
The Solution
SAP ERP packaged solution for the dairy industry
Description
… Focuses on key business processes that create a baseline for future growth
… Delivers immediate benefits by solving the need for system heterogeneity
… Enables significant business process automation
Analyze,
Market Deliver and
Plan, and Procure Manufacture
and Sell Service
Develop
Define business Realize savings Improve Improve marketing Establish closer
Objectives
Business
SAP AG 2006
SAP ERP packaged solution for the dairy industry
Suppliers & Analyze, Plan & Develop Procure Manufacture Market & Sell Deliver & Service Customers (e.g.
Partners Retailers) &
Channel
Partners
Sourcing & Procurement
Milk Procurement from Producer
Additional Raw Material Procurement
Procure to Stock
Internal Procurement
Product
Development
Recipe Management Manufacturing
Dairy Production
Planning
Dairy Process Control
SAP AG 2006
Generic Food Scenarios
Suppliers & Analyze, Plan & Develop Procure Manufacture Market & Sell Deliver & Service Customers (e.g.
Partners Retailers) &
Channel
Partners
Sourcing & Procurement
Procure to Stock
Internal Procurement
SAP AG 2006
Procure to Stock
Supports price comparison of vendors’ offers
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
Business Benefits
processing
contract
Goods receipt
Inspect goods
Batch number
Automate operational tasks assignment
Stock update
Improve vendors’ selection and prices comparison Invoice verification
through quotation handling
Formalize agreements by contract management
Guarantee quality check through goods receipt
inspections
SAP AG 2006
Internal Procurement
Encompasses cross-plant internal procurement of products including
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
Business Benefits
Automate operational tasks
Increased visibility of stock and stock transfers
SAP AG 2006
Sales Order Processing
Manage the entire customer order process — variable pricing, delivery,
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
Business Benefits
Improve sales execution timeline
Improve order fulfillment rate
Provide the customer with alternative services and
methods for invoicing and payments
SAP AG 2006
Returns
Focuses on the processing of credit memos if no goods are sent back.
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
movement.
Empties Pr ocessing
Operational End-to-End Scenarios
Inventory Managem ent
Quality Management
Trac eability & Food Safety
Cross Com pany Transactions
Enterprise Management & Support
Financials & Controlling
Excise D uty (Beverage) G65
Business Benefits
Enable corporate compliance strategy
Effective batch-specific returns processing
SAP AG 2006
Traceability and Food Safety
Capability to track and trace products at all stages of production,
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
Business Benefits
specific return
processing
Manage batches
based on shelf life
Professionally managing a possible product expiration
recall
Minimize risk of non-compliance with food &
beverage regulations
Effective batch-specific returns processing
SAP AG 2006
Inventory Management
Consists of the whole procurement and delivery cycle with warehouse for
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
SAP AG 2006
Financials and Controlling
Helps to get an insight into all aspects related to accounting and
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers,
Develop Consumers, Channel
Partners
controlling
Manufacture
Production Planning
Production
Sell & Deliver
Sales Order Processing
Direct Store Delivery (DSD)
Rebate & Bonus Management
Commissions
Indirect Sales
Returns
Business Benefits
receivable Product costs
accounting planning
Bank accounting Product cost
Closing activities controlling
Implement an ERP solution fully compliant Cash management
and continuously updated with local legal Assets
management
and fiscal requirements
Improve efficiency in accounting activities
due to a seamless process integration
Enhance company profitability analysis
through profit and loss calculation
SAP AG 2006
Our Specific Solution Offering for the Dairy Industry
Suppliers & Partners Analyze, Plan & Procure Manufacture Market & Sell Deliver & Service Customers (e.g.
Develop Retailers) & Channel
Sourcing & Procurement Partners
Procure to Stock
Internal Procurement Dairy
Milk Procurement from Producer
Additional Raw Material Procurement Food
Manufacturing
Product Dairy Production
Development Planning & Process
Recipe Management Control
SAP AG 2006
Product Development with Recipe Management
Managing the fast and efficient product development by structured re-
usable product specifications
Seamless integration into the production planning and execution process
Suppliers & Partners Analyze
Dev
SAP AG 2006
Milk Procurement from the Producer
Encompasses the efficient procurement and collection of raw milk
Ensure compliance with high quality standards and traceability requirements
Calculate payments based on quantity and quality characteristics Suppliers & Partners Analyze
Dev
Monitor procurement and payment process
SAP AG 2006
Additional Raw Material Procurement
Supports the additional purchase of raw materials from other companies on the
determined shortage in the demand planning process
Calculate vendor payment based on the raw material quantity and quality
Suppliers & Partners Analyze
characteristics. Dev
SAP AG 2006
Dairy Production Planning and Process Control
Manage the multilevel manufacturing processes including seamless batch
and quality management
Incorporates the ever-changing quantity and quality of the raw material
Suppliers & Partners Analyze
Dev
Provide powerful tools to gain a cross-stages raw material controlling
Business Benefits
Material resource into components decision for
planning (without Material valuation inspection lots
shelf-life) Manage shelf-life
Simulate planning expiration date for
Optimize and streamline production process Graphical capacity final products
planning
Increase profitability by improved visibility
Controlling &
to raw material utilization and losses Analysis
Comply with the high quality standards and Cross-stages raw
material controlling
traceability requirements Product costing
Batch information
cockpit
Production
information system
SAP AG 2006
Raw Material Sales
Supports the sales of raw materials between dairies based on the raw
material requirements and the available surpluses
Pricing and distribution are based on the raw material quality characteristics
Suppliers & Partners Analyze
Dev
SAP AG 2006
SAP ERP for the Dairy Industry Provides Increased
Shareholder Value for Your Business
Business Objectives Business Areas Business Opportunities SAP Scenarios
(SAP ERP for the Dairy Industry)
Improve customer Improve order fulfillment
Sales and Customer Order
Revenue satisfaction Improve sales execution timeline
Growth Improve customer understanding
Indirect Sales
Increase sales
Improve order fill rate Raw Material Sales
Reduce operating costs and
Distribution increase efficiency Recipe Management
* For further details, please refer to the SAP ERP for the Dairy Industry Brief.
SAP AG 2006
Queries
Thank You !!
SAP AG 2006