Supply Chain with a Conscience

1. David Landsman, SAP Ariba (SAP) Michelle Tapia, SAP Ariba (SAP) Padmini Ranganathan, SAP Ariba (SAP) / August 30, 2016 Supply Chain with a Conscience Public

2. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public Agenda Introductions Understanding the Slavery Economy Addressing from a Communications Perspective Addressing from a Practical Perspective Q&A

3. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public Introductions David Landsman Global Director, Ariba Discovery, SAP Ariba (SAP) Michelle Tapia Manager, Global Buyer Adoption, Ariba Discovery, SAP Ariba (SAP) Padmini Ranganathan VP, Solution Management, SAP Ariba (SAP)

4. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Public What is slavery? The acquisition of people using force, deception, or coercion with the intent to exploit. Source: Not for Sale

5. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Public The slavery economy 30 million people (at least) US$150 billion annually Second-largest criminal industry Source: Not for Sale

6. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Public Labor trafficking and debt bondage The largest and most profitable form of slavery $51 billion annual business Roughly half are children Traffickers average $4,000 per victim Source: Not for Sale, Child Labor Organization

10. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Public Human trafficking in Silicon Valley Most prevalent are sex trafficking and forced labor 50% of victims are American 86% are female Poverty is the determining risk factor Source: Juniper Networks and Not for Sale, 2015

12. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 12Public Yes, people really care 86% of consumers say “ingredient transparency is extremely important or very important” for companies to address as part of their products, services, or operations. 75% of manufacturers believe consumers are more concerned of late with the ethical and fair treatment of workers at all levels of the supply chain. 68% of manufacturers feel it is very important to clearly show consumers what ingredients or components are included in their products. Sources: Accenture, BBMG

14. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Public The cost of poorly managed communications Nestlé to switch palm-oil supplier after pressure from Greenpeace Suppliers of milk powder to China issued fine Meat industry under scrutiny as horsemeat scandal spreads In China, human costs are built into an iPad

15. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 15Public The benefits of well-managed communications Meet the change makers: Tiffany's diamonds and gold add greenish sparkle Starbucks: from bean to cup Ordering a Starbucks Fairtrade espresso is a rewarding experience for you and the farmers that grow our coffee beans How Nike solved its sweatshop problem Nestlé + Greenpeace: a model for sustainable sourcing of palm oil?

20. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 20Public Moving beyond the traditional approach TRADITIONAL SUPPLY CHAIN COMMUNICATIONS FOCUS REPUTATION MANAGEMENT REPUTATION ENHANCEMENT BEHAVIOR CHANGE Goal Manage negative impacts Strategy Traditional issue and crisis management Tactical Policies, issue mapping, materiality assessment, reactive messages, crisis management systems Goal Amplify positive impact Strategy Communications programs to enhance reputation Tactical Traditional PR, NGO engagement, CSR reporting, and more Goal Directly engage consumers and suppliers for long-term benefit Strategy Focused campaigns targeting consumers and suppliers that spring people into action Tactical Proactive storytelling, deep stakeholder engagement, high-profile partnerships, ambassador programs, and more

22. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 22Public Level 3: Behavior change Fedele Bauccio, CEO at BAMCO “I saw people forced into trailers because they didn’t work hard enough. Men, women, and children picking tomatoes in horrible environmental conditions.”

23. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 23Public Behavior change: next steps Published The Inventory of Farmworker Issues and Protections in the United States Hosted TEDxFruitvale Joined by Costco and Walmart as founders of the Equitable Food Initiative “Farmworker Awareness Week” at café locations

24. Practical Applications

33. How Can SAP Ariba Solutions Help?

34. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 34Public Made in a free world SAP and Ariba have combined the Ariba Network and the Made in a Free World Forced Labor Risk Determination and Mitigation database

35. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 35Public Important notice This information reflects the status of SAP Ariba solution planning as of March 2016. All such information is confidential information (per the contract between or companies), and must not be further disclosed, as stated in the confidentiality clause of that contract. This presentation contains only intended guidance and is not binding upon SAP or Ariba to any particular course of business, product strategy, and/or development. Its content is subject to change without notice. SAP and Ariba assume no responsibility for errors or omissions in this document. SAP and Ariba shall have no liability for damages or any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials.

36. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 36Public Guided buying Catalog Core procurement Supplier management and risk Sourcing and contracts Vendor master in the cloud Total supplier 360 with extensible supplier data model De-duplication Two-way sync with back-end Integration with procurement Scale compliance SAP Ariba solutions: innovation themes

37. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 37Public Solution themes Vendor master in the cloud Supplier 360 Complete supplier lifecycle • High fidelity integration with ERP (vendor hierarchy, partner roles, purchasing organization and company code data) • Self-service supplier portal • Extensible supplier data model • De-dupe vendor records • Onboarding, qualification, segmentation, performance, phase-out • Flexible matrix architecture to support supplier management based on dimensions including business unit, category, region • Preferred supplier management • Single supplier record across SAP Ariba solutions • Supplier transaction details from SAP Ariba cloud apps • Extensible to import external transaction data • Holistic supplier relationship view • KPI integration to ERP and back-end systems Supplier risk • Segment suppliers by risk level and risk type • Assess and mitigate risk by engagements • Use cognitive risk scoring model and aggregate views • Conduct risk and compliance checks, ongoing or on demand • Proactively monitor hidden risks across supply base

38. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 38Public 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 • Use flexible hierarchical matrix for managing suppliers Category Location >Category >Region >Sub-category >Hub >Material >Country >Plant  Customize supplier, segmentation, and qualification statuses  Use 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 Planned innovations Matrix-based segmentation and qualification Planned innovations

39. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 39Public Matrix inheritance Electronics Integrated circuits Pressure sensors Magnetometer Capacitors Resistors United States Canada Europe Middle East Standard components North America EMEA Global Supplier A qualified for integrated circuits in North America  Search suppliers qualified for integrated circuits in United States – Supplier A shows in search Supplier B qualified for integrated circuits in France  Search suppliers qualified for integrated circuits in Europe – Supplier B shows in search

40. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 40Public Supplier risk Risk due diligence while onboarding suppliers  Control risk profile generation at the time of onboarding  Risk profile enriched with corporate information, compliance data, country profile, and risk scores Planned innovations

41. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 41Public Qualification questionnaires by matrix United States Canada Europe Middle East North America EMEA Global General questionnaire applicable to all Region/country specific questionnaire Supplier A is getting qualified for integrated circuits in Middle East  System pulls in questionnaires for global and Middle East

42. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 42Public Supplier risk Segment suppliers by risk with personalized risk views  At-a-glance view of suppliers at risk by risk type and risk level for your category/region  One-click listing of risk scores continually updated by configurable risk model  One-click drilldown to risk profile for any supplier Planned innovations

43. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 43Public Supplier risk Risk monitor by preferred and/or qualified suppliers  Use proactive risk monitor to drive targeted action of your preferred suppliers (or all)  Know contributing factors of risk and trending  Get detailed context to collaborate internally and with suppliers Planned innovations

44. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 44Public Supplier risk Comprehensive actionable risk profile  Comprehensive risk profile for your supplier, with zero manual touch  Third-party ratings and reports attached  Initiation of risk assessment with full transparency Planned innovations

45. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 45Public Supplier risk Supplier search results with potential risk scores  Proactive knowledge of risk scores and trend  Comparison of risk information across suppliers Planned innovations

46. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 47Public Why Ariba Supplier Information and Performance Management? Manage all aspects of supplier information on an integrated Web-based portal and a single profile for supplier to share and maintain 360-degree supplier information visibility Integrated workflows, approvals, surveys, scorecards, and analytics for measuring supplier; Best-practice templates and services for assessment and corrective actions Total performance management Single sign-on across all buyer relationships and SAP Ariba solutions enhances supplier ease of use and thus drastically improves supplier adoption Unified seller console Ability to capture information across supplier lifecycle from onboarding to measurement using a single platform with information synchronization with other SAP Ariba modules and seamless integration with existing platforms Ability to capture full supplier value Integrated spend management platform An integrated application suite addressing your entire spend management ecosystem – spend analysis, sourcing, contracts management, P2P, and supplier network

47. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 48Public What is Ariba Discovery? The premier service for matching business buyers and sellers globally Benefits for buyers • Achieve incremental savings of 15% • Reduce costs up to 75% for seller identification • Save up to 90% of time for seller identification • Base seller selection on better information • Collaborate easily with sellers Benefits for sellers • Showcase your profile to buyers free • Maintain high visibility for decision makers ready to buy • Access a cost-effective lead source • Grow your business • Collaborate easily with buyers  Over 1 million buyers and sellers  More than 20,000 product and service categories  Over 190 countries  More than US$5 billion in business posted per year  Nearly 150,000 green and diverse sellers

48. Thank you Contact information: David Landsman Global Director, Ariba Discovery +1 (678) 336-2797 MichelleTapia Manager, Global Buyer Adoption, Ariba Discovery +1 (678) 245-1833 Padmini Ranganathan VP Solution Management, SAP Ariba +1 (650) 646-0048 #SAPAribaLive