Delivering Real-Time Business Value for Mill Products

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This deck is a SoH Executive positioning document in 3 parts for Mill Products

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Delivering Real-Time Business Value for Mill Products

  1. 1. July 2013 Delivering Real-Time Business Value for Mill Products SAP Business Suite Powered by SAP HANA Public
  2. 2. 2© 2013 SAP AG or an SAP affiliate company. All rights reserved. The real-time opportunity Mill companies are facing stiff international competition in times of strained liquidity and volatile commodity prices – while customers are willing to shop for best prices, terms, and conditions.  Manage production and logistics to win in a commodity market  Achieve maximum return on assets and increase margins  Fulfill customer order expectations at low cost
  3. 3. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 3Public Profit-driven supply chain  Supply chain planning with real-time insight into demand, supply, and capacity  Global inventory visibility and order promising to keep inventory low and maximize on-time fulfillment Plant and asset operations excellence  Manufacturing and asset visibility and performance for sustainable asset operations.  Asset optimization and maintenance operations for maximum reliability and utilization Sustainable customer relationships  Order and contract management for configurable products for differentiated offerings and customer- focused services. Differentiate in the commodity markets Align business operations with customer needs
  4. 4. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 4Public SAP Business Suite powered by SAP HANA The next-generation business platform Real-time business In-memory Business transactions Digital connections Collaborative business CloudSocial Big DataMobile One platform bringing it all together Advanced analytics
  5. 5. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 5Public Industry value map for mill products Differentiate in commodity markets Profit-Driven Supply Chain Sales and Operations Planning Supply Chain Planning Supply Chain Execution and Transportation Commodity Procurement and Price Risk Mitigation Sustainable Customer Relationship Profit-Driven Segmentation Sales Enablement B2B E-Commerce and Self-Service Order and Contract Management for Configurable Products Plant and Asset Operations Excellence Manufacturing and Asset Visibility and Performance Manufacturing Operations and Genealogy Asset Optimization and Maintenance Operations Operational Risk Management People and Talent Core Human Resources and Payroll Talent Management Time and Attendance Management Workforce Planning and Analytics Finance Financial Performance Management Accounting and Financial Close Treasury and Financial Risk Management Collaborative Finance Operations Enterprise Risk and Compliance Management Procurement Supplier Discovery and Lifecycle Management Strategic Sourcing and Contracting Procurement and Order Collaboration Collaborative Invoice to Pay IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Inventory Visibility and Order Promising Energy and Environmental Resource Management Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Development and Integration
  6. 6. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 6Public Industry value map for mill products Real-time value for key end-to-end processes Profit-Driven Supply Chain Sales and Operations Planning Supply Chain Planning Supply Chain Execution and Transportation Commodity Procurement and Price Risk Mitigation Sustainable Customer Relationship Profit-Driven Segmentation Sales Enablement B2B E-Commerce and Self-Service Order and Contract Management for Configurable Products Plant and Asset Operations Excellence Manufacturing and Asset Visibility and Performance Manufacturing Operations and Genealogy Asset Optimization and Maintenance Operations Operational Risk Management People and Talent Core Human Resources and Payroll Talent Management Time and Attendance Management Workforce Planning and Analytics Finance Financial Performance Management Accounting and Financial Close Treasury and Financial Risk Management Collaborative Finance Operations Enterprise Risk and Compliance Management Procurement Supplier Discovery and Lifecycle Management Strategic Sourcing and Contracting Procurement and Order Collaboration Collaborative Invoice to Pay IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Inventory Visibility and Order Promising Energy and Environmental Resource Management Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Development and Integration Highest real-time business value for mill products
  7. 7. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 7Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Supply chain planning Business value for supply chain monitoring  Lack of near real-time information  Batch jobs to extract data from planning system for central reporting typically on weekly basis  No ad-hoc operational reporting  Reporting, queries, dashboards that have to be created by each customer  Time-consuming data loads in traditional reporting tools  Not possible to run sub-daily planning jobs and analyze the results because of the long data-preparation times  Inability to respond fast to ad hoc queries from customers, which may result in lost sales  Decision support based on near real- time information  Information can be updated using delta capabilities  Out-of-the-box analytical reporting scenarios provided with streamlined data load  Planned ability for customers to add their own KPIs and dashboards  Advanced data retrieving and computing functionalities of SAP HANA are used to optimize the reporting of supply chain planning data Reduce overall supply chain planning cost by 10% Decrease Increase cycle time for forecast by 10% on-time delivery performance by 5%
  8. 8. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 8Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Inventory visibility and order promising Business value for inventory (warehouse) management  No up-to-date view of the inventory situation  Need for accurate display of actual stock to react quickly to stock shortfalls  Time-consuming inventory management reporting  Real-time access to complex inventory management data  New analytical inventory management cockpit  Real-time stock insight and inventory monitoring  Real-time access to complex inventory management data  High-performance inventory management with large volumes of documents  Higher process efficiency in adjacent procurement processes (such as purchase order or invoice processing) Reduce Obsolete inventory by 8% Increase Reduce Inventory accuracy by 5% inventory carrying cost by 6%
  9. 9. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 9Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Manufacturing and asset visibility and performance Business value for asset planning and scheduling  Maintenance scheduling that consumes a great deal of time  High amount of master data influences performance of data maintenance  Manual and error-prone process for preselection of maintenance plans  Potential for objects needed for maintenance calls to be missing  High number of maintenance plans that need to be scheduled frequently leads to a weekly scheduling scheme  Accelerated mass transactions  Instant analysis of top of transactions  Preselection of due plans, speeding up the process significantly  Real-time analytics on all data, including machine sensor information  Scheduling of all maintenance plans within a specific time frame  Planning several times a day (instead of once a week) results in up-to-date scheduling information in maintenance operations  Faster response times lead to more- accurate maintenance scheduling Increase return on assets by 10% Cut Reduce MRO inventory by 11% unplanned downtime or outages by 16%
  10. 10. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 10Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Manufacturing operations and genealogy (1/2) Business value for material requirement planning  Periodic material requirement planning (MRP) runs and outdated results  Lack of near real-time information  Inability to replan quickly if conditions change due to long run times  Limited order window (9 a.m. to 5 p.m.)  Short planning periods (5 to 7 days)  Only delta planning  Simple product BOMS  No holistic production planning across all relevant production sites  Faster replanning allowing more frequent MRP runs in shorter cycles  Flexible response to market changes  Simulation of different what-if scenarios in real-time  Extended order window (8 a.m. to 8 p.m.)  Extended planning periods (14 to 30 days)  Full product portfolio  Complex materials and BOM  Cross-plant planning Faster MRP Run-time savings: 50% Increase Reduce customer service levels 38% out of stocks 36%
  11. 11. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 11Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Manufacturing operations and genealogy (2/2) Business value for operational and ad hoc reporting  Lack of insight into important company data resulting in duplication of effort, errors in data consolidation, and customer sales misquotes  Lack of near real-time information  High cost of IT maintenance cost  High cost of support queries  Costly and time-consuming support for two separate servers for operational and ad hoc reporting and transactional enterprise system.  Simple reporting taking long hours to generate  Inability to detect issues and deviations quickly enough for senior management to perform exception management  Common and customer-defined views across CRM, financials, and logistics data, enabling faster reconciliation and drill-through and fewer misquotes  Flexible aggregation and slice and dice of real-time data  Tables and views exposed to power users for building ad hoc reports for analysis, thereby ensuring self- service for key users  Reduction in support queries as business can perform first-level analysis before approaching IT  Faster reaction to demand changes with faster report generation  Ability to provide early insights into deviations and risks to so that management can take corrective measures Productivity Overall time savings: 30% IT cost Reporting Lower maintenance costs by 33% Speed up run-times by 98%
  12. 12. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 12Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Asset optimization and maintenance operations Business value for asset planning and scheduling  Maintenance scheduling that consumes a great deal of time  High amount of master data influences performance of data maintenance  Manual and error-prone process for preselection of maintenance plans  Potential for objects needed for maintenance calls to be missing  High number of maintenance plans that need to be scheduled frequently leads to a weekly scheduling scheme  Accelerated mass transactions  Instant analysis of top of transactions  Preselection of due plans, speeding up the process significantly  Real-time analytics on all data, including machine sensor information  Scheduling of all maintenance plans within a specific time frame  Planning several times a day (instead of once a week) results in up-to-date scheduling information in maintenance operations  Faster response times lead to more- accurate maintenance scheduling Increase return on assets by 10% Cut Reduce MRO inventory by 11% unplanned downtime or outages by 16%
  13. 13. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 13Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Order and contract management for configurable products Business value for operational and ad hoc reporting  Lack of insight into important company data resulting in duplication of effort, errors in data consolidation, and customer sales misquotes  Lack of near real-time information  High cost of IT maintenance cost  High cost of support queries  Costly and time-consuming support for two separate servers for operational and ad hoc reporting and transactional enterprise system  Simple reporting taking long hours to generate  Inability to detect issues and deviations quickly enough for senior management to perform exception management  Common and customer-defined views across CRM, financials, and logistics data, enabling faster reconciliation and drill-through and fewer misquotes  Flexible aggregation and slice and dice of real-time data  Tables and views exposed to power users for building ad hoc reports for analysis, thereby ensuring self-service for key users  Reduction in support queries as business can perform first-level analysis before approaching IT  Faster reaction to demand changes with faster report generation  Ability to provide early insights into deviations and risks to so that management can take corrective measures Productivity Overall time savings: 30% IT cost Reporting Lower maintenance costs by 33% Speed up run-times by 98%
  14. 14. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 14Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Accounting and financial close Business value for operational and ad hoc reporting  Lack of insight into important company data resulting in duplication of effort, errors in data consolidation, and customer sales misquotes  Lack of near real-time information  High cost of IT maintenance cost  High cost of support queries  Costly and time-consuming support for two separate servers for operational and ad hoc reporting and transactional enterprise system.  Simple reporting taking long hours to generate  Inability to detect issues and deviations quickly enough for senior management to perform exception management  Common and customer-defined views across CRM, financials, and logistics data, enabling faster reconciliation and drill-through and fewer misquotes  Flexible aggregation and slice and dice of real-time data  Tables and views exposed to power users for building ad hoc reports for analysis, thereby ensuring self-service for key users  Reduction in support queries as business can perform first-level analysis before approaching IT  Faster reaction to demand changes with faster report generation  Ability to provide early insights into deviations and risks to so that management can take corrective measures Productivity Overall time savings: 30% IT cost Reporting Lower maintenance costs by 33% Speed up run-times by 98%
  15. 15. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 15Public Today With SAP Business Suite on SAP HANA KPI improvements are high-level estimates and will have to be validated for each customer situation. Treasury and financial risk management Business value for financial and managerial reporting  Risk of noncompliance due to unfulfilled (overruns in) audits  Decision-relevant information not readily available  Data analysis not supported or automated  High market volatility, which requires real-time analytics to quickly react on financial exposures  High cost of finance operations due to missing central database  No single source of truth available for exposure determination  Large number of time-consuming, and non-value-added processes required to provide (access) accurate, up-to-date information  Flexible data aggregation in SAP NetWeaver Business Warehouse, including slice and dice of real-time data  Multiple data layers that allow new dimensions of forecasting, planning, and simulations such as what-if analysis and working capital optimization  Starting point to build analytical applications providing KPIs to CFOs and head of treasury  Central control of organization, including traceability of business events, which is essential for external auditing Increase drill-down levels by 5% Reduce Decrease treasury and cash management costs by 7% compliance and risk management costs by 10%
  16. 16. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 16Public Customer cases EMEA mill products company • SAP HANA software and SAP HANA Platform • Fraud prevention • Supply chain execution and transportation management • Manufacturing and asset visibility and performance US$38 million benefit over five years
  17. 17. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 17Public Next step Business scenario recommendation and value discovery workshop  SAP offers a proven methodology and approach to discover the customer-specific business improvement areas and quantify value potential.  We suggest such a workshop with your line-of-business and IT experts.  As a starting point, we recommend a performance and usage analysis of your current software system.
  18. 18. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Thank you
  19. 19. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Appendix with detailed customer cases
  20. 20. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 20Public Customer case: EMEA mill products company Summary validated scenarios Feasibility Businessvalue Legend LowHigh Low High SAP Business Suite on SAP HANA SAP HANA products SAP HANA Platform Annual revenue: US$14 billion Fraud prevention (0.5% of revenue)Transportation management on SAP HANA (2%-3% reduction) Real-time plant and profitability modeling Operational and Ad Hoc Reporting (20% Cost Savings) Operational and ad hoc reporting (20% cost savings) SAP HANA platform: customer specific SAP HANA products: SAP NetWeaver BW on SAP HANA , high-performance applications (HPAs), apps powered by SAP HANA SAP Business Suite on SAP HANA Scenario (business value) 1 Short term Transportation management: Supply chain execution and transportation Operational and ad hoc reporting and analysis: Build an analytics platform for mobile sales reporting and plant maintenance Operational data mart: Build an agile data mart platform for operational and ad hoc reporting in sales and management reporting 2 Medium term Enterprise risk and compliance: Fraud prevention Plant and asset operations excellence: Model the whole production process 3 In evaluation Other functions – to be discussed in future discovery workshops SAP HANA use cases mapped to industry value map end-to-end solutions Phase – deployment road map
  21. 21. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 21Public Customer case: EMEA mill products company Summary validated scenarios -2.667 -32450 5333 68000 -40.000 -20.000 0 20.000 40.000 60.000 80.000 2013 Phase 1 Phase 2 Costs SoH Applications Platform Anything built on the platform that is customer specific ‒ new business processes and business models SAP NetWeaver BW on SAP HANA, HPAs, apps powered by SAP HANA – mapped to IVM E2E solutions € Currently available functionalities (SP0, 1, 2); 23 scenarios mapped to IVM E2E solutions; and planned capabilities (All of the end-to-end solutions on the industry value map are in scope.) Actual SAP customer business case Annual benefits, SAP HANA platform : €68 million Annual benefits, applications powered by SAP HANA: NA Annual benefits, SAP Business Suite on SAP HANA: €5.3 million Estimated deployment costs Total transition cost: €35 million SAP HANA Platform SAP HANA products SAP Business Suite on SAP HANA SoH = SAP Business Suite on SAP HANA
  22. 22. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 22Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may not be completely validated. Innovation scope SAP HANA Platform (customer specific) E2E solution Mill products - enterprise risk and compliance management Value potential 4 Feasibility 3 Steel producer – fraud prevention Mill products Business context and goals  The company has a set of processes to identify and prevent fraud. They proved to be ineffective, however, due to disconnected processes and an inability to analyze available sources of operational data. Business challenges  Prevention of fraud needs fast reaction on known patterns of suspicious and fraudulent activity, based of different sources of information. There is no capacity to connect data and make analysis in real time to prevent losses proactively. Process innovations  Integrate fraud monitoring processes, leverage historical data to identify fraud, and act in real time (instead of reactively, when loss recovery is much more difficult). Contribution of SAP HANA  Real-time automated analysis of big volumes of data from different sources. Value drivers/KPIs  Prevent profit loss due to fraud. Low High 1 5 Low High 1 5
  23. 23. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 23Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may not be completely validated. Innovation scope SAP HANA Platform (customer specific) E2E solution Mill products – operational reporting Value potential 4 Feasibility 3 Customer case: North American building materials company – operational and ad hoc reporting Mill products Business context and goals  The company has a set of processes to identify and prevent fraud. They proved to be ineffective, however, due to disconnected processes and an inability to analyze available sources of operational data. Business challenges  Sales: Sales force requires mobile access to customer data to make customer meetings more effective. Previous reporting, based on monthly reports, required many manual steps to be performed each month.  Plant maintenance: Relies on reactive maintenance process based on data from SAP ERP, SAP NetWeaver BW, and legacy software. Plant maintenance required standardized reporting across all plants to reduce machine/line downtime and improve compliance ratio to improve productivity. Process innovations  Flexible mobile sales reporting via iPad on-demand  Senior-level formatted customer reporting and detailed data drill-down functionalities for the sales force  Common key metrics in plant maintenance across all plants, from SAP and non-SAP data sources  Maintenance reporting on near real-time data in a visual format enabling easy monitoring of KPIs and performance across the board Contribution of SAP HANA Value drivers/KPIs • 3x improved compression rate • Zero latency customer reporting available anywhere • Consolidation of real-time customer data vs. monthly updates • Root-cause analysis of maintenance issues • Very intuitive visual format combines several reporting requirements on one dashboard • Higher customer satisfaction • Better margins • Increased machine/line uptime • Improved compliance ratio • Improved productivity • 99% faster reporting • 6,800x faster table segmentation • Eight-week implementation Low High 1 5 Low High 1 5
  24. 24. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 24Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may not be completely validated. Innovation scope SAP HANA Platform (customer specific) E2E solution Mill products – operational reporting Value potential 4 Feasibility 3 Customer case: North American metal company – operational and ad hoc reporting Mill products Business context and goals  Business spends too much time building spreadsheets instead of analyzing and making important financial and operational decisions. Business challenges  Wasted time, lack of confidence in data, and inability to respond to changes in data. Complex Microsoft Excel worksheets with limited visualization functionalities. Process innovations  Information at the fingertips of end-users (CEO, business analysts, and common users). Demonstrate real-time data and instantaneous reporting and analysis. Allow users to create own reports.  Extract and report on global controlling data in 30 seconds.  Gain instant value from new data model: years worth of margin analysis data calculated in 10 seconds; refresh annual sales data in 2 seconds  Entire project took only four weeks. Contribution of SAP HANA  53:1 data compression ratio  Query times in microseconds  Developed with drag-and-drop tools  Easier to use WEBi, Visi, and Explorer BI tools for end users Value drivers/KPIs  Cost savings of nearly 20% annually  CEO and CFO are thrilled Low High 1 5 Low High 1 5
  25. 25. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 25Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may not be completely validated. Innovation scope SAP HANA Platform (customer specific) E2E solution Manage and optimize transportation cost Value potential 4 Feasibility 3 Business context and goals  SAP Transportation Management (SAP TM) on SAP HANA for railway transportation Business challenges  Many difficulties on Russian Railways’ side, but definitely also a big improvement potential on the customer’s side: no single system for transportation planning and execution; high transportation costs (payments for external fleet, payments to railways); inability to plan exact dates (or short range) for delivery to customer; long order-to-delivery cycle; inability to optimize production stock (in port terminals, on the way to terminals and customer); inability to increase efficiency in accounts receivable and payables. Process innovations  Whole chain of transportation ‒ from long-term planning through operative planning, execution, dispatching, and cost analysis ‒ integrated with system of Russian Railways and ERP Contribution of SAP HANA  Ability to analyze large amounts of data stored in memory and make fast decisions Value drivers/KPIs  Transportation costs: – Decrease cost of external fleet for raw materials transportation: US$5 million – Decrease penalties from fleet operators for cars standing idle: US$0.2 million – Increase fleet turnover: US$0.2 million – Decrease penalties for idle standing railcars on the railroad: US$0.03 million Low High 1 5 Low High 1 5 Customer case: EMEA mill products company – supply chain execution and transportation management Mill products
  26. 26. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 26Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may not be completely validated. Innovation scope SAP HANA Platform (customer specific) E2E solution Mill products - manufacturing and asset visibility and performance Value potential 5 Feasibility 3 Business context and goals  Need to model the plant operations and profitability with real-time visibility Business challenges  Very large and granular volume of data to be modeled in the production process and profitability calculation Process innovations  SAP HANA Platform will allow accurate, aggregated, and real-time visibility of plant production and profitability. Contribution of SAP HANA  SAP HANA will also allow what-if simulation in real time to allow the business to react to events in real time (for example, machinery breakdown or late delivery of raw materials). Value drivers/KPIs  Increased operating profit Aluminum smelter – real-time plant and profitability modeling Mill products Low High 1 5 Low High 1 5

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