Extending Your SAP Supply Chain Systems to Suppliers with SAP Ariba Solutions for Direct Spend

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Extending Your SAP Supply Chain Systems
to Suppliers with SAP Ariba Solutions for
Direct Spend
Florian Seebauer
SAP Ariba Solutions for Direct Spend
Marko Navala
SAP Ariba Supply Chain Collaboration, Product Management

2© 2017 SAP SE or an SAP affiliate company. All rights reserved |
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Agenda
SAP Ariba Solutions for Direct Spend: The Big Picture
SAP Ariba Strategic Sourcing Suite
SAP Ariba Supply Chain Collaboration for Buyers: Planning and Execution
Summary
Q&A

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BuyerSupplier
Fulfill SettleMarket
Buyer management
Procure SettleSource
Supplier management
Ariba Network
Spendcategories
Direct
Indirect and MRO
Contingent labor
Travel
Integration to SAP and non-SAP solutions,
secure, open platform
© 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP Ariba solutions in the
context of the digital economy

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Direct spend and supply chain challenges
Manual handoff
between sourcing
and production
Standalone point
solutions
Highly customized
on-premise systems
Partial coverage of
spend categories with
current solutions
Supplier portals EDI VANs Direct connect
Sourcing collaboration
Supply chain collaboration
Manual
collaboration
with suppliers
Outdated systems limit collaboration

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Faster time to market, orchestrate multitier supply chains, reduce costs and inventory
SAP Ariba Strategic
Sourcing Suite SAP Ariba Supply Chain Collaboration for Buyers
SAP
Integrated
Business
Planning
SAP Ariba Solutions for Direct Spend: supply chain
PLM APSERP ERP
Supplier and risk management
Invoice and paySource and contract
ContractSourceDesign MakeOrderRequest PayManageReceive
Buy and make
CommitForecast
Plan
buyer supplier

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Agenda
Summary
Q&A

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SAP Ariba Supplier
Lifecycle and Performance
SAP Ariba Sourcing SAP Ariba Contracts
Pricing
conditions
Product
lifecycle
sourcing
Supplier qualification and segmentation
User experience + SAP Cloud Platform + integration SAP ERP and non-SAP solutions
A new layer of innovations to support direct materials sourcing
Volume and
price
forecasting
Product
costing
Supplier
perf.
automation
Advanced
optimization
Multilevel
BOM
Service
item
hierarchy
PLM
integration

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Supply chain: product sourcing flow
(Cloud-centric hybrid)
 Engineering design
 SAP S/4HANA and
PLM integration
 Bill of material
creation
 API hub
 Product sourcing
 Assignment of
sourcing expert
 Material 360-degree view
 Product costing
 Simple RFQ  Product costing
 Price acceptance
 Purchase info record
SAP Ariba Strategic
Sourcing Suite
PLM and SAP S/4HANA
Value drivers
 Lower cost of parts – COGs reduction
 Faster time to market
 Contract compliance
 Process efficiency
SAP S/4HANA
Engineering Sourcing Quoting Price acceptance
Purchase info
record
SAP Ariba Strategic
Sourcing Suite
SAP Ariba Strategic
Sourcing Suite

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SAP Ariba Supplier Management architecture
Supplier-managed
information
Common supplier record
Other ERPs
MDG-S
Other DWs
SQL and NoSQL DBs
SAP Business Suite,
SAP S/4HANA, and
other ERPs
Two-
way
sync
Syncbusinessprocess
Syncbusinessprocess
SAP Ariba Supplier Lifecycle and Performance
SAP Ariba Supplier Risk
Vendor
model
Qualification
matrix
Segmentation
matrix
Spend
matrix
SAP Ariba source-to-settle application suite
Onboarding Qualification Segmentation
Performance
management
Development
and phase-out
News
sources
Government
sources
Ratings
sources
Financial
sources
External data sources
SAP Ariba Supplier Risk
Segmentation
by risk
Preliminary
due diligence
Risk
remediation
Ongoing
monitoring
Engagement risk
assessments

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Product capabilities Key benefits
 Vendor model alignment with ERP: In the
SAP Ariba supplier management system
we are aligning the object model to have
all details of the ERP. Some of the high
level data are:
 Vendor general data
 Vendor purchasing data
 Vendor company code data
 Vendor bank details
 Vendor partner functions
 Vendor hierarchy
 Vendor dunning data
 Vendor attachments
 Support vendor master in the cloud as an
extension to the ERP
 Easier integration within SAP Ariba
solutions and with SAP ERP
Vendor model
Correspondence

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Product capabilities Key benefits
 New supplier lifecycle business processes
for qualification and segmentation
 Customize segmentation and qualification
business processes based on category
and location dimensions
 Flexible hierarchical matrix for managing
suppliers
Category Location
>Category >Region
>Sub-category >Hub
>Country
>Plant
 Customize supplier, segmentation, and
qualification statuses
 Hierarchical questionnaires and logic to
aggregate from different levels in hierarchy
 Identify suppliers by preferred segmentation
 Enforce compliance
 Gain visibility across organization
 Enhance approval workflows and segmentation
Matrix-based segmentation and qualification

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Key innovations planned to address direct material sourcing
 Material master and ERP
integration
 Contract line item
documents
 Increased event limits – 10k
items
 Bonus-penalty scoring
 Product lifecycle sourcing
 Product costing
 Volume forecasting
 Bill of material support and
integration
 Supplier qualification and
segmentation
 Simplified user experience for
RFX support
 Service item support
 360-degree material/part and
category report
 Pricing conditions – volume
 Lookup table formulas
 What-if analysis and advanced
optimization enhancements
 Automated price negotiation
 Japanese auctions
 Service item hierarchy and
service master integration
 Complex price conditions –
commodity index based pricing
 Collaboration support for sharing
engineering drawings and large
attachments
 Sourcing and contract integration
with SAP ERP-IS Retail including
article master
 Risk and savings opportunity
integration
 Supplier performance automation
Key value levers
 Improved master data
 Deeper BOM
integration
 Better supplier
qualification
 Reduced contract
leakage in supply
chain execution
Phase 1 Phase 2 Phase 3
Key
phases

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Agenda
Summary
Q&A

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What are we hearing from supply chain practitioners?
of manufacturing is
outsourced in a typical
company.
of buyers have poor
visibility into
source of supply.
of suppliers lack
visibility into customer
order management.
32%
65%
70%
“Supply chains…need visibilityacross
multiple systems to synchronize manufacturing
and procurement.”
Without visibility, complex supply chains risk:
HIGH
SAFETY
STOCK
LEVELS
HIGH
INVENTORY
CARRYING
COSTS
STOCKOUTS
MISSED or
DELAYED
&
Source: “Supply Chain Insights, 2014”

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SAP Ariba Supply Chain Collaboration for Buyers
Brings visibility and efficiency to direct materials procurement for manufacturing
Your trading partnersYour company
Industrial manufacturer
High tech manufacturer
Consumer packaged
goods company
Contract manufacturers
Component suppliers
Subassembly suppliers
Raw material suppliers
Distribution centers
Logistics providers
 Collaboration simplicity with a single business network
 Embedded supplier onboarding services
 End-to-end process orchestration to validate and enforce compliance
 Network intelligence, data, and insights to reduce supply chain risk
buyer supplier

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Collaborative network for real-time visibility
Manufacturing and retail
collaborative processes
 Enable collaboration with
direct materials trading
partners
 Complement and extend
back-end systems
 Provide instant visibility into
availability of supply
Buyer Supplier/contract
manufacturer
Contract mfg and consigned inventory
Purchase order and schedule agreement
Forecast collaboration
Quality collaboration
Purchase/subcontract order
Schedule agreement release
Component inventory data
Goods receipt notice
Component receipt notice
PO confirmation
Component consumption
Advance ship notice
Self-billing/ERS invoice
Component ship notice
Consignment inventory status
Invoice
Forecast commit
Forecast/demand
Manufacturing visibility
Quality notification/response Deviation request /response
Payment
buyer supplier

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Supply chain
Forecast collaboration
SAP Integrated Business
Planning and SAP S/4HANA
 Sales and operation
planning
 Consensus demand
 Supplier receives a
stochastic forecast
 Supplier commits to
the forecast
 Revised demand plan
based on supplier
commits
SAP Ariba Supply Chain
Collaboration for Buyers
Planning and SAP S/4HANA
Value drivers
 Inventory reduction
 Increased customer fill rates
 Supply assurance
Process flow requires project-based integration.
Demand plan Forecast Commit Constrained plan

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Planning collaboration with SAP Integrated Business Planning
(Trading partners)
Any system connectivity
Open collaboration data
exchange
 Demand
 Supply
 Capacity
 Inventory,
 …
Standard
Ariba
Network
integration
SAP Integrated Business Planning
(Manufacturers)
Planning
SAP HANA platform

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Planning collaboration with SAP Integrated Business Planning
(Trading partners)
SAP Integrated Business Planning
(Manufacturers)

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Supply chain
Execution
 Material requirements
planning
 Purchase requirement
generation
 Automated source
determination
 SA release and
delivery schedule
 PO call-off from
contract
 Network-based
collaboration – POC,
POA, ASN, bar code
labels
 Buyer exception monitor
 Smart invoicing, invoice
status
 Automated invoice entry
SAP S/4HANA
Value drivers
 Inventory reduction
 Increased customer fill rates
 Supply assurance
SAP S/4HANA SAP S/4HANA SAP Ariba Supply Chain
MRP
Purchase order/
scheduling release
Supplier
collaboration
Invoice receipt

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Execution
(Trading partners)
SAP S/4HANA
(Manufacturers)

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Product road map overview: key themes and capabilities, 2017
 Supplier-managed
inventory (SMI)
collaboration
 Dashboard usability
improvements
 Reporting
 Supply chain intelligence
(for example, perfect
order KPI)
 Quality collaboration
enhancements
 SMI enhancements
 Forecast collaboration
enhancements
 Additional supply
chain intelligence
 Items to confirm
enhancements
 Download for
Inventory
 Order confirmation
approval
Q3 – Planned Q3/2017 Q4 – Planned Q4/2017
Q1 – Recent innovations
Q2 – Planned Q2/2017
Q1: recent innovations
 Supply chain mobile
app for buyers
 Supply chain
collaboration
dashboards
 Quality collaboration
Q2 Q3 Q4
2017
Planned

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Agenda
Summary
Q&A

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SAP Ariba direct spend solutions help drive digital transformation of the source-to-settle process
In summary . . .
Integrate your planning and
execution systems to your
suppliers with two-way
response
Address all categories of
direct, indirect, and services
spend
Manage source-to-contract
processes on a single
solution

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Thank you.
Contact information:
Florian Seebauer
f.seebauer@sap.com
Marko Navala
SAP Ariba Supply Chain Collaboration, Product Management
marko.navala@sap.com

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We are making
significant investments
in streamlining direct
materials source-to-
settle processes
PLANNING
COLLABORATION
CONTRACT
SOURCE
PLANNING
DESIGN
MANAGE
ERP AND PLANNING
INTEGRATION
EXECUTION
COLLABORATION
MANUFACTURE
SAP Ariba
Solutions for
Direct Spend
End-to-end
process
management
Total landed
cost
calculation
Collaborative
planning
Collaborative
supply chain
execution
Network
intelligence
Supplier
onboarding
Advanced
negotiation
and supplier
selection
Support for
services and
materials

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Legend: Available scenario. Potential starting points of the process are indicated with the following symbol:
SAP Ariba Sourcing
“BoM manager”
Ariba Network
“Supplier”
SAP Ariba Sourcing
“Sourcing manager”
SAP ERP
* Price history and trend is based on sourcing price acceptance
Application innovation: product sourcing flow
Sourcing
price
acceptance
Part
360-degree
view*
Part
worklist
BoM
Purchase
info
record
Supplier
response
Simple
RFx
SAP PLM BoM
BoM
Pin
BOM
Assign
part owner
Configurationdata
Masterdata

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Legend: Potential starting points of the process are indicated with the following symbol:
SAP Ariba
Contract
Management
Ariba Network
supplier/USE
SAP Ariba
Sourcing
SAP ERP
SAP S/4HANA
Integration between SAP Ariba Sourcing, SAP Ariba Contract Management,
and SAP ERP
Sourcing
request
RFX
auction
Sourcing
project
RFQPR
Operational
contract
Purchase
order
Supplier
response
Award
Contract
workspace

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Outsourcing | Trading partners | Tracking | Geographies | TechnologiesMORE
Complex manufacturing supply chains inhibit visibility into supply
Raw material
suppliers
Component
suppliers Subassembly
suppliers
Contract
manufacturers
Large enterprise
OEM

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Lack of visibility hits top and bottom line
of manufacturing is
outsourced in a typical
company.
of buyers have poor
visibility into
source of supply.
of suppliers lack visibility
into customer
order management.
32%
65%
70%“Supply chains … need visibility across multiple systems
to synchronize manufacturing and procurement.”
Without visibility, complex supply chains risk:
HIGH
safety
stock
levels
HIGH
inventory
carrying
costs
Stockouts
shipments
missed or
delayed
&
Source: Supply Chain Insights, 2014

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Usability and productivity: SAP Ariba Supply Chain Collaboration for Buyers
Buyer Mobile App
Real-time visibility
Information
on the go
Easy issue
resolution
Push notifications
Order acceptance
and rejection
Real time status
Full item details
Personalized role view
and information filters
Pin documents
and items
Supply chain reports
and charts
FUTURE PLANS:
Subject to change

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Capabilities
 Shared visibility of
inventory levels and
min/max thresholds
 Planned shipments and
delivery schedules
 Supplier initiated
replenishment purchase
order
 Built-in reporting
 Configurable formulas and
custom key figures
Benefits
 Optimized inventory levels
 Better fill rates and supply
chain reliability
 Improved supplier
production efficiency
New business process innovation: supplier managed inventory
Buyer Trading partner
Planned shipments
SMI scheduling
agreement
Inventory
information:
inventory levels
demand
min max
ASN against planned
shipment
Invoice
Goods receipt
Self-billing/ERS
ASN against
replenishment PO
FUTURE PLANS:
Subject to change

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Capabilities
 Data sharing on inspection of
materials and finished products
 Predefined inspection
specifications
 Visibility into inspection results
 Single place for activities review,
change control, and issues
management
 Integrated document repository
 Event and incident tracking, audit
trail, and reporting
Benefits
 Simple and scalable inspection
processes
 Fast and transparent inspections
 Increased quality compliance
 Increased agility of quality
collaboration processes
 Flexible and compliant information
sharing
New business process innovation: quality inspection and document
collaboration
Buyer Trading partner
Order
Quality inspection
request
Quality inspection
results
Quality inspection
status
Quality review
document
Quality review
document
FUTURE PLANS:
Subject to change

Extending Your SAP Supply Chain Systems to Suppliers with SAP Ariba Solutions for Direct Spend

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