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Delivering Real-Time Business Value for Wholesale Distribution

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This deck is a SoH Executive positioning document in 3 parts for Wholesale Distribution

This deck is a SoH Executive positioning document in 3 parts for Wholesale Distribution

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  • 1. Delivering Real-Time Business Value for Wholesale Distribution SAP Business Suite powered by SAP HANA July 2013 Public
  • 2. 2© 2013 SAP AG or an SAP affiliate company. All rights reserved. New competitors are entering the wholesale distribution market and driving existing distributors to find new ways to serve their customers  Increase the number of sales channels offered to customers  Optimize the number of products, services, and geographies  Route customers carefully to the most profitable cost-to- serve models The real-time opportunity
  • 3. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 3Public Becoming an innovation-driven enterprise Align business operations with customer needs Unlock new growth opportunities before your competitors do • Predict trends and evolving customer needs • Enable complete insight into customer information • Deliver superior customer service across different channels • Identify profit-drivers and profit-destroyers and initiate action to increase profitability Drive your business at the speed of the market • Enable insight -driven business decisions with real-time insight • Deliver fast simulation and impact analysis • Utilize real-time, adaptive forecast and replenishment processes • Simplify your IT landscape Empower people to decide and act in the business moment • Support agile decision making with real-time insight • Deliver one version of the truth to enable true insight to action
  • 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. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 5Public Industry value map for wholesale distribution Fuel profitable growth for wholesale distributors IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Profitability Optimization Customer Stratification and Cost to Serve Spend Analysis Cost Recovery and Rebates Opportunity to Cash Marketing Planning and Resource Management Contracts, Orders, and Receivables Web Channel Customer Service and Support Procure to Pay Supplier Discovery and Lifecycle Management Procurement and Order Collaboration Collaborative Invoice to Pay Supply Chain Planning and Execution Demand Management Transportation Management Warehouse Management People and Talent Core Human Resources and Payroll Talent Management Time and Attendance Management Finance and Trading Financial Performance Management Accounting and Financial Close Treasury and Financial Risk Management General Trading Enterprise Risk and Compliance Management Supply Chain Analytics Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Development and Integration
  • 6. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 6Public Industry value map for wholesale distribution Real-time value for key end-to-end processes IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Profitability Optimization Customer Stratification and Cost to Serve Spend Analysis Cost Recovery and Rebates Opportunity to Cash Marketing Planning and Resource Management Contracts, Orders, and Receivables Web Channel Customer Service and Support Procure to Pay Supplier Discovery and Lifecycle Management Procurement and Order Collaboration Collaborative Invoice to Pay Supply Chain Planning and Execution Demand Management Transportation Management Warehouse Management People and Talent Core Human Resources and Payroll Talent Management Time and Attendance Management Finance and Trading Financial Performance Management Accounting and Financial Close Treasury and Financial Risk Management General Trading Enterprise Risk and Compliance Management Supply Chain Analytics Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA Platform Application Development and Integration Highest value for wholesale distribution 1 4 5 2 3
  • 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 must be validated for each customer situation Contracts, orders, and receivables Business value for line of business (LoB) Sales  Missed market opportunities due to a lack of visibility and inefficient processes  Data explosion, driven by a new level of connectivity for consumers through mobile devices and social networks  Data in disparate data sources, which prevents a true 360-degree view of the customer  Agile marketing to respond faster to changing market dynamics and opportunities  New analytical, data-mining functions for Big Data (social media and predictive)  Near-real-time monitoring and reporting on marketing performance  One central place for collecting all customer data, leading to a 360- degree view of customers in real time  Precision marketing to personalize every interaction with the customer Improve profitability by 0.5% Optimize Increase return on marketing investments by 15% customer satisfaction by 40%
  • 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 must be validated for each customer situation Customer stratification and cost to serve Business value for profitability and cost analysis  Data latencies and processes delays affect the ability to react to issues and opportunities  Lack of data depth and user self- service affect internal decision- making  Long-running processes  Time-intensive data queries  Mostly manual data analysis  Substantial amount of effort (time spent) not directly adding to value  Suboptimal resource efficiency and effectiveness  Timely execution of critical business processes supports decision making and increases the ability to act swiftly (insight-to-action) in dynamic market environments  Ability of critical transactions and calculations to run quickly  Instant response times on queries  Prebuilt analytics to automate the data-analysis process  Leaner processes from data capture through data analysis  Increased productivity through process-optimized analytics and mobile support Improve Reduce Minimize service level performance cycle times and manual effort Operating costs
  • 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 must be validated for each customer situation Financial performance management Business value for planning, budgeting, and forecasting  Planning performance limited to OLAP; staged cubes for transactional and master data  Data-load performance driven by the amount of data extracted from SAP Business Suite  Reporting, loading, and retraction performance limits planning iterations  Drill-down within OLAP cube, and drill-through to OLTP data and data in SAP Business Suite within standard times  Seamless replication of master and transactional data from SAP Business Suite  Availability of more granular data to support planning  Negation of Big Data challenge; for faster extract and activation times for days sales outstanding (DSO)  Iterative planning and real-time simulation supported through improved performance  Improved performance for drill-down (expand) and consolidation (collapse)  Fast drill-through and live view of transactional data in SAP Business Suite Improve service level performance Reduce Minimize cycle times and manual effort Operating costs
  • 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 must be validated for each customer situation Demand management Business value for material requirements planning  Decisions often based on periodic material requirement planning (MRP) runs and outdated information  Process done in batch  Inability to replan quickly if conditions change due to long run times Prediction of inventory coverage for critical items is difficult  Inability to replan if conditions change during the planning horizon due to long run times  Faster replanning, allowing more frequent MRP runs in shorter cycles  Instant reaction to demand changes and updates to the supplier  Demand information is propagated faster through the supply chain More frequent MRP runs:  Reduced inventory and safety-stock levels  Faster information flow toward suppliers, enabling them to react faster to changed planning conditions  Better synchronized material demand and supply planning with reduced bullwhip effect Reduce out of stocks by 36% Decrease Limit inventory and safety stocks by 29% bullwhip effect
  • 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 must be validated for each customer situation Demand management Business value for demand-driven supply chain  Access to and effective use of timely demand information from the supply network becoming more and more difficult  Decisions often based on incomplete, inaccurate, and often outdated information  Challenge of administering today’s hardware and system landscapes  Increased business and expert user productivity with faster planning processes and improved user experience and by driving rapid consensus across the supply chain network  Near-real-time reporting with increased speed of information analysis, leading to better supply chain visibility and decision making  Improved production and cost efficiency by simplified system setup and administration and by providing a more robust planning foundation Reduce planning cycle times 36% Increase Reduce Supply chain performance 18% total cost of ownership (TCO) 24%
  • 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 must be validated for each customer situation Supply chain analytics Business value for supply chain monitoring  Lack of near-real-time information  Batch jobs to extract data from planning system to central reporting – typically on a weekly basis  No ad hoc operational reporting  Need for creation of reporting, queries, and dashboards by individual customers  Inability to run subdaily planning jobs and analyze the results because of the long data-preparation times in SAP NetWeaver BW  Lack of fast responses to ad hoc queries from customer might result in lost sales.  Decision support based on near-real- time information  Ability to update information through delta capabilities  Standard analytical reporting scenarios provided with streamlined data load  Planned ability for customers to add their own key performance indicators (KPI) and dashboards  Use of advanced data-retrieval and computing capabilities of SAP HANA Platform optimize reporting on supply-chain planning data Reduce time spent compiling, generating, and waiting for reports Increase Optimize visibility into key supply chain data in an easily consumable manner analysis capabilities with multiple levels of aggregation and drill- down techniques
  • 13. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 13Public Next step Business-scenario recommendation and value discovery workshop  SAP offers a proven methodology and approach to discover customer-specific areas for business improvement and quantify value potential  We suggest such a workshop with your LoB and IT experts  We recommend a performance and usage analysis of your current system as a starting point
  • 14. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Thank you
  • 15. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Appendix Detailed customer cases
  • 16. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 16Public Reference wholesale distribution customer Summary of validated scenarios (combined findings) Feasibility Businessvalue Legend MediumHigh Medium High Corporate performance mgmt. commodities forecast SAP Business Suite on SAP HANA SAP HANA: Applications SAP HANA Platform Profitability and pricing analysis (US$23 million annual value) Supply chain optimization analytics ($19 million once) Real-time analytics (call center) Real-time supply chain (machine to machine (M2M)) National dashboard (enterprise performance management (EPM) and mobility) 1 Short Term FIN: Profitability Pricing Analysis Increase buy-side profit through detailed analysis and supplier evaluation. Improve supplier negotiation to increase margins. SCM: Supply Chain Optimization Analytics Enable fact-based decisions on a single holistic platform to optimize the supply chain and support initiatives to reduce working capital EPM: National Dashboard About 25,000–30,000 orders per day and large data volumes. National dashboard consolidation of data from several systems, delivered today in a static format. Mobility and a highly interactive real-time version are needed for executive management. 2 Medium Term EPM: Corporate Performance Management Improved market forecast for commodities to assess risk exposure CRM: Real-Time Analytics Loyalty management; voice and text mining SCM: Real-Time Supply Chain through M2M connectivity Optimize logistics 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 SAP HANA use case Phase – deployment road map SAP HANA use cases mapped to industry value map end-to-end solutions
  • 17. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 17Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may be incompletely validated A leading distributor of fine wines and spirits – Real-time offer management Wholesale distribution Business Context and Goals  Enable a sales rep to add value to client through sales insights based on heat maps and social networks and help activate sales  Enable a sales rep to become a value-added resource to the retailer owner and improve the quality of client interactions Business Challenges  Mobility is required as a key component because analysis must be put in the field to get value  Customer is mobilizing this solution in the Florida market through a proof of concept Process Innovations  Analyze past sales and suggest bundles based on like customer profiles and consumption patterns  Mobilize insights on an iPad to make the sales person to be more effective with the customer Contribution of SAP HANA  Real-time offer and suggestions: Suggest buying quantities based on consumption patterns (frequently ordered items)  Ability to up-sell orders based on discount levels and promotions Value Drivers and KPIs  Improve the number of sales transactions where cross-sell and up-sell is offered Innovation scope SAP HANA Platform (customer-specific) End-to-end (E2E) solution Consumer products – enterprise marketing optimization Value potential 5 Feasibility 5 Low High 1 5 Low High 1 5
  • 18. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 18Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may be incompletely validated A leading distributor of fine wines and spirits – Warehouse benchmarking report Wholesale distribution Business Context and Goals  Enable warehouse employees to see how the warehouse is performing in real time  Enable employees to work toward targets in real time and reassign resources as needed throughout the warehouse Business Challenges  Warehouse operations are evaluated on 87 KPIs that would take 3 days to produce a benchmark report Process Innovations  Warehouse workers monitor themselves and reassign themselves as needed throughout the shift Contribution of SAP HANA  The report now runs in less than 10 seconds, allowing it to be displayed in the warehouse on large dashboard monitors Value Drivers and KPIs  Improve warehouse efficiency  Improve employee satisfaction Innovation scope SAP HANA Platform (customer-specific) End-to-end (E2E) solution Wholesale distribution – warehouse management Value potential 4 Feasibility 5 Low High 1 5 Low High 1 5
  • 19. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 19Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may be incompletely validated Wholesale distributor – Strategic customer stratification Wholesale distribution Business Context and Goals  Enable sales staff to improve gross margin by stratifying customers by margin contribution and other key factors Business Challenges  Sales and support staff were unaware of which customers contributed to margin and which drained service resources Process Innovations  Sales and service staff can now tailor their level of service based on the contribution of the customer to overall margin and drive low-margin customers toward low cost-to-serve engagement models Contribution of SAP HANA  SAP HANA provides the processing speed required to give real-time data access Value Drivers and KPIs  Improve gross margin  Improve earnings Innovation scope SAP HANA Platform (customer specific) End-to-end (E2E) solution Wholesale distribution – customer stratification and cost to serve Value potential 5 Feasibility 4 Low High 1 5 Low High 1 5
  • 20. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 20Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may be incompletely validated Wholesale distributor – Profitability and pricing analysis Wholesale distribution Business Context and Goals  Profitability and pricing analytics: Increase buy-side profit through detailed analysis and supplier evaluation. Improve supplier negotiation to increase margins Business Challenges  The company needs to perform more granular profitability analysis at both the customer and product levels  It lacks margin insight at the customer and product levels and cannot segment customers or offer better service levels Process Innovations  Enforce business-process standards and improve visibility into the overall planning process at the company with a unified data platform  Perform profitability analysis at the most detailed customer and product levels, including both branded and generic data  Improve customer segmentation with detailed analysis of customer and product data Contribution of SAP HANA  Gain insight into margins at customer and product levels to negotiate contracts with suppliers  Simulate margin erosion on price negotiations before signing a supplier contract Value Drivers and KPIs  Improve gross margin Innovation scope SAP Business Suite on SAP HANA (now and in the future) End-to-end (E2E) solution Wholesale distribution – customer stratification and cost to serve Value potential 5 Feasibility 4 Low High 1 5 Low High 1 5
  • 21. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 21Public Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation sessions and may be incompletely validated Wholesale distributor – Supply-chain optimization analytics Wholesale distribution Business Context and Goals  Supply-chain optimization analytics: Enable fact-based decisions on a single holistic platform to optimize the supply chain and support initiatives to reduce working capital Business Challenges • Missed opportunities to optimize the supply chain based on better and more timely analysis of company data: • Inability to identify impact on margin from decisions based on a hunch • Inability to analyze at the most-detailed level across all SKUs, customers, time series, and distribution centers • Lack of a systematic approach, causing lengthy manual processes and data-integrity issues Process Innovations  Identify opportunities more systematically by analyzing complete and detailed supply-chain data holistically; analyze all aspects such as inventory levels, manufacturer information, customers, and financial data Contribution of SAP HANA  SAP HANA can be the one and only data repository for all supply chain data (SAP and non-SAP) directly from source systems Value Drivers and KPIs  Working capital reduction Innovation scope SAP Business Suite on SAP HANA (now and in the future) End-to-end (E2E) solution Wholesale distribution – supply chain analytics Value potential 4 Feasibility 4 Low High 1 5 Low High 1 5
  • 22. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 22Public Breaking the limits at Würth We have a slogan at Würth: Break your limits. That means that we always want to get better and better every day. The key value for the business is speeding up key processes such as MRP, order entry, and invoice management. Harald Holl, Responsible for IT infrastructure and data centers, Würth Group AT A GLANCE Objective Proof of concept Solution SAP ERP powered by SAP HANA Benefits Accelerate key processes (material requirements planning (MRP), order entry, and invoicing) and reduce the total cost of ownership Watch the video here