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Delivering Real-Time Business Value for Mining

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

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Delivering Real-Time Business Value for Mining

  1. 1. Delivering Real-Time Business Value for Mining SAP Business Suite Powered by SAP HANA July 2013 Public
  2. 2. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 2Public The real-time opportunity Mining companies must address the key challenges of commodity price volatility, operational efficiency, and environment and safety issues. This requires real-time insight and digitization of the mining enterprise.  Align production (mining and downstream processing) and maintenance  Manage commodity risk  Manage operational risk
  3. 3. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 3Public Enabling safe and economic mineral production Align business operations with customer needs Optimized mine operations • Mine operations and performance management to plan, execute, and control production operations in mines, crushers, and downstream processing plants • Efficient asset maintenance for more effective collaboration between production, maintenance, and repair operations, as well as spare parts and inventory management Efficient sales and supply chain management • Commodity sales and price risk mitigation to manage contract-to-cash processes, including commodity and foreign exchange risk hedging Operational risk and compliance management • Operational risk management to assess and manage operational risks involving people, assets, and locations Energy and environmental resource management to monitor energy consumption and take corrective actions to reduce the carbon footprint
  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 mining Safe and economic mineral production Optimized Mine Operations Asset Portfolio and Project Management Mine Operations and Performance Management Efficient Asset Maintenance Asset Visibility and Performance Operational Risk and Compliance Management Operational Risk Management Energy and Environmental Resource Management Product Safety and Stewardship Efficient Sales and Supply Chain Management Commodity Sales and Price Risk Mitigation Bulk and Non-Bulk Transportation 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 Commodity Management IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance 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 mining Safe and economic mineral production Optimized Mine Operations Asset Portfolio and Project Management Mine Operations and Performance Management Efficient Asset Maintenance Asset Visibility and Performance Operational Risk and Compliance Management Operational Risk Management Energy and Environmental Resource Management Product Safety and Stewardship Efficient Sales and Supply Chain Management Commodity Sales and Price Risk Mitigation Bulk and Non-Bulk Transportation 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 Commodity Management IT Management Application Lifecycle Management IT Infrastructure Management IT Portfolio and Project Management IT Service Management IT Strategy and Governance Technology Solutions Analytics Consumer ExperienceData Management Enterprise Mobility SAP HANA platform Application Development and Integration Highest real-time business value for mining
  7. 7. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 7Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Asset portfolio and project management Business value for project management (project system)  Long wait and locking times along business processes hinder project execution and impact flexibility to react to deviations  User acceptance is reduced due to usability issues in handling large project data  Real-time analysis of high volumes of data for complex, long-lasting projects or cross-project monitoring is challenging due to high data volumes  Due to lack of 360-degree real-time transparency across applications, deviations in costs, time, resources, or quality are often seen too late in the process  Reduced waiting and locking times of critical transactions along the end-to- end process, resulting in higher process efficiency and improved employee productivity  Planned: Project execution cockpit en- abling project managers as well as project employees to analyze status and progress of one or multiple projects in execution from an end-to- end perspective at maximum speed with real-time data, and to derive and execute actions wherever applicable  Acceleration of project info system reporting and new project line-item reporting, delivering faster insights  Early insight into risks and highlighting of deviations in real time, enabling timely corrective measures Cut maintenance, repair, and overhaul (MRO) inventory by 28% Increase Reduce return on assets by 24% unplanned downtime or outages by 18% With SAP Business Suite on SAP HANA
  8. 8. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 8Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Mine operations and performance management (1/3) Business value for inventory (warehouse) management  Need for accurate display of actual stock to react quickly to stock shortfalls  No up-to-date view of the inventory situation  Time-consuming inventory management reporting  Real-time stock insight and inventory monitoring  Real-time access to complex inventory management data  Real-time access to complex inventory management data  New analytical inventory management cockpit  High-performance inventory management with large volumes of documents  Higher process efficiency in adjacent procurement processes (such as purchase order or invoice processing) Increase inventory accuracy by 9% Reduce Cut obsolete inventory by 8% inventory carrying cost by 10% With SAP Business Suite on SAP HANA
  9. 9. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 9Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Mine operations and performance management (2/3) Business value for asset planning and scheduling  Maintenance scheduling that consumes a great deal of time  High amount of master data that influences performance of data maintenance  Manual and error-prone process of preselecting maintenance plans  Potentially missing necessary objects for maintenance calls  High number of maintenance plans that must be scheduled frequently, leading to a weekly scheduling scheme  Accelerated mass transactions  Instant analysis on top of transactions  Preselection of plans that significantly speeds up the process  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), resulting in up-to-date scheduling information in maintenance operations  Faster response times enabling more accurate maintenance scheduling Increase return on assets by 10% Cut Reduce MRO inventory by 15% unplanned downtime or outages by 8% With SAP Business Suite on SAP HANA
  10. 10. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 10Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Mine operations and performance management (3/3) Business value for material requirement 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 runtimes; difficult to predict inventory coverage for critical parts  Inability to replan if conditions change during the planning horizon due to long runtimes  Faster replanning, allowing more frequent MRP runs in shorter cycles  Instant reaction to work-order changes and updates to the supplier More frequent MRP runs  Allowing for reduction in inventory and safety stock levels  Enabling faster information flow toward suppliers so they can react faster to changed planning conditions  Ability to plan spare parts and MRO materials without overstocking  Better synchronized material demand and maintenance and repair planning Reduce out-of-stocks by 36% Decrease Reduce inventory and safety stocks by 29% MRO obsolescence With SAP Business Suite on SAP HANA
  11. 11. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 11Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Efficient asset maintenance (1/3) Business value for inventory (warehouse) management  Need for accurate display of actual stock to react quickly to stock shortfalls  No up-to-date view of the inventory situation  Time-consuming inventory management reporting  Real-time stock insight and inventory monitoring  Real-time access to complex inventory management data  Real-time access to complex inventory management data  New analytical inventory management cockpit  High-performance inventory management with large volumes of documents  Higher process efficiency in adjacent procurement processes (such as purchase order or invoice processing) Increase inventory accuracy by 9% Reduce Cut obsolete inventory by 8% inventory carrying cost by 10% With SAP Business Suite on SAP HANA
  12. 12. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 12Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Efficient asset maintenance (2/3) Business value for asset planning and scheduling  Maintenance scheduling that consumes a great deal of time  High amount of master data that influences performance of data maintenance  Manual and error-prone process of preselecting maintenance plans  Potentially missing necessary objects for maintenance calls  High number of maintenance plans that must be scheduled frequently, leading to a weekly scheduling scheme  Accelerated mass transactions  Instant analysis on top of transactions  Preselection of plans that significantly speeds up the process  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), resulting in up-to-date scheduling information in maintenance operations  Faster response times enabling more accurate maintenance scheduling Increase return on assets by 10% Cut Reduce MRO inventory by 15% unplanned downtime or outages by 8% With SAP Business Suite on SAP HANA
  13. 13. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 13Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Efficient asset maintenance (3/3) Business value for material requirement 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 runtimes; difficult to predict inventory coverage for critical parts  Inability to replan if conditions change during the planning horizon due to long runtimes  Faster replanning, allowing more frequent MRP runs in shorter cycles  Instant reaction to work-order changes and updates to the supplier More frequent MRP runs  Allowing for reduction in inventory and safety stock levels  Enabling faster information flow toward suppliers so they can react faster to changed planning conditions  Ability to plan spare parts and MRO materials without overstocking  Better synchronized material demand and maintenance and repair planning Reduce out-of-stocks by 36% Decrease Reduce inventory and safety stocks by 29% MRO obsolescence With SAP Business Suite on SAP HANA
  14. 14. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 14Public Today KPI improvements are high-level estimates and will have to be validated for each customer situation. Commodity sales and price risk mitigation 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 that 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 as of today  Large number of time-consuming, and non-value-added processes required to access accurate, up-to- date information  Flexible data aggregation in SAP NetWeaver BW, including slicing and dicing 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 heads 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 mgmt costs by 10% compliance and risk mgmt costs by 10% With SAP Business Suite on SAP HANA
  15. 15. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 15Public Today 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 to important company data, resulting in duplicating of effort, errors in consolidating data, and customers 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 the transactional enterprise system  Simple reporting that takes long hours to generate  Inability to detect issues and deviations in time 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, thereby increasing productivity  Flexible aggregation and slicing and dicing of real-time data  Tables and views that are exposed to power users for building ad hoc reports for analysis, thereby helping ensure self-service for key user  Reduced support queries, because business can perform first-level analysis before approaching IT  Faster reaction to demand changes with faster report generation  Ability to provide management with early insights into deviations and risks, so corrective measures can be taken Productivity increases with overall time savings of 30% Lower costs Reporting of IT maintenance 33% runtimes speeded up 98% With SAP Business Suite on SAP HANA
  16. 16. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 16Public Today 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 that 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 as of today  Large number of time-consuming, and non-value-added processes required to access accurate, up-to-date information  Flexible data aggregation in the SAP NetWeaver Business Warehouse (SAP NetWeaver BW) application, including slicing and dicing 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 heads 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 mgmt costs by 10% compliance and risk mgmt costs by 10% With SAP Business Suite on SAP HANA
  17. 17. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 17Public Customer cases Mining company  SAP HANA platform and SAP Business Suite powered by SAP HANA  Bulk and non-bulk transportation management – goods movements and railcar analytics in real time  Asset visibility and performance US$2.6 million benefit over 5 years
  18. 18. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 18Public 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 starting point, we recommend a performance and usage analysis of your current system.
  19. 19. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Thank you
  20. 20. © 2013 SAP AG or an SAP affiliate company. All rights reserved. Appendix with detailed customer cases
  21. 21. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 21Public Customer case: mining company Summary of validated scenarios Feasibility BusinessvalueLowHigh Low High Annual revenue: US$5 billion Scenario (business value) Transportation costs (5% reduction) Optimized mine operations (US$5.7 million) Phase – deployment road map 1 Short term Transportation mgmt: real-time railcar analytics 2 Medium term Asset visibility and performance 3 In evaluation Other functions – to be discussed in future discovery workshops 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 Legend SAP Business Suite on SAP HANA SAP HANA applications SAP HANA Platform SAP HANA use cases mapped to industry value map end-to-end solutions
  22. 22. © 2013 SAP AG or an SAP affiliate company. All rights reserved. 22Public Customer case: mining company Summary of validated scenarios -1.500 -728 1.850 3.000 -2.000 -1.500 -1.000 -500 0 500 1.000 1.500 2.000 2.500 3.000 3.500 2013 Phase 1 Phase 2 Costs SoH Applications Platform $ SAP HANA platform: Anything built on the platform that is customer-specific – new business processes and business models SAP HANA products: SAP NetWeaver BW powered by SAP HANA; high-performance apps (HPAs); applications – mapped to IVM E2E solutions Currently available functionality (SP0, 1, 2) – 23 scenarios mapped to IVM E2E solutions, and planned functionality(all of the E2E solutions on the IVM are in scope) SAP HANA platform SAP HANA products SAP Business Suite on SAP HANA SoH = SAP Business Suite on SAP HANA Annual benefits, SAP HANA platform Annual benefits, applications powered by SAP HANA Annual benefits, SAP Business Suite on SAP HANA Estimated deployment costs Total transition cost: US$5 million Based on actual SAP customer engagements
  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. Steel mining – bulk and non-bulk transportation – goods movements and railcar analytics in real time Mining Innovation scope SAP HANA products (HPAs, apps) E2E solution Mining – bulk and non-bulk transportation management Value potential 4 Feasibility 2 Low High 1 5 Low High 1 5 Business context and goals  SAP Transportation Management application powered by SAP HANA for railway transportation Business challenges  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 receivables and payables Process innovations  Whole chain of transportation – from long-term planning through operative planning, execution, and dispatching and cost analysis, integrated with system of Russian railways and ERP Contribution of SAP HANA  Ability to analyze large volumes of data in memory and make fast decisions Value drivers/KPIs  Transportation costs – decrease cost for external fleet for raw materials transportation (gondola cars): US$5 million; decrease penalties from fleet operators for idle stand cars: US$0.2 million; increase fleet turnover (roll cars): US$0.2 million; decrease penalties for idle standing railcars on the railroad: US$0.03 million; working capital (stock, accounts receivable and payable): mentioned as qualitative improvements, no value assessment
  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. Coal mining – real-time railcar analytics Mining Innovation scope SAP HANA platform (customer-specific) E2E solution Mining – bulk and non-bulk transportation management Value potential 4 Feasibility 3 Low High 1 5 Low High 1 5 Business context and goals  Company manages thousands railcars every day and needs to know where are they and make sure they are delivering goods on time Business challenges  Sub-optimal railcar turnover and lack visibility into shipping operations Process innovations  Analysis of high volumes of railcar operations data in real time to speed up delivery, reduce need for railcars and associated costs Contribution of SAP HANA  Support for real-time analytical capabilities Value drivers/KPIs  Transportation costs

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