Supply Chain Management


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Supply Chain Management

  1. 1. Supply Chain Management A change agent for Business Network Transformation Vivek C. Sinkar Solution Management SCM March 2008 SCM Product Strategy
  2. 2. Powerful Trends Re-Shaping Business Environment for Global Supply Chains Increasingth Phone Sold 1 Billion use launches of Sensory Deregulation Oil crosses $100 / Barrel 1TATA MotorsCapitalists Billion New New Container Shipped: Increasing Numbers of Technology in cell phones Supply Every selling2008 January 2, and Consumers How Nokia is0.1Recalls $2500 CarSecond Product “Nano” Opening up of protected Chains to the developing world markets Globalization Stretching Supply Chains May 2007 to new levels Disruptive - Technology Connectivity, Digitization Commoditization Increased market consumption, but challenged margins
  3. 3. Leading to Transformation of Companies and their Business Networks Shift in Supply Bases Shift in Demand Bases 45% 40% China 35% US Mexico 30% India 25% 20% 15% 10% 5% 0% Shifting M anufacturing Base Shifting Supply Base “ 40% of Companies “ Emerging Economies will Outsource a Large Part of exceed 50% of the world’s Fulfillment Process ” Economic Output by 2010 ” Source: AMR Research Source: World Economic Forum
  4. 4. Business Network Transformation force Supply Chains into the “Zone of Complexity” Unstructured Supply ild New Bu Partners New Products New Customers Structured e at m to Au Stable Unstable Demand
  5. 5. Next Generation Supply Chains: Need for Combining Efficiency and Responsiveness Increase Responsiveness Unstructured Across the Responsive Supply Network Supply Network Supply Network Supply Integrate Processes ild Bu Vi and s ib ilit ate y Information IT m to Structured Au Operational Automate Efficient Excellence Supply Chain Processes Enterprise Stable Unstable Demand
  6. 6. The Need for New Strategies From “build to last”… …To “build to adapt” Push Based Hybrid Push/Pull Command & Control Connect & Collaborate Intermediate Customer Value End Customer Value Efficiency Efficiency & Responsiveness èFrom Linear Supply Chains to Responsive Supply Networks…. © SAP 2007 / 5
  7. 7. Combining Efficiency and Responsiveness
  8. 8. The Supply Chain Network evolution: From Linear Supply Chains to Supply Chain Network From Linear supply chains, optimization within 4 walls, standard response …
  9. 9. The Supply Chain Network Evolution: From Linear Supply Chains to Supply Chain Network Supply Network From Linear Supply = Competitive AdvantageEnd to End To Global Chains, Optimization Collaborative within 4 walls,Goal = Common Standard Serve the Customer Processes response …
  10. 10. Combining Efficiency & Responsiveness Develop and Leverage core capabilities in the network Collaborative Demand and Supply Planning Streamline Logistics and Fulfillment Increase Supply Network Visibility & Collaboration Manage Risk and Ensure Increase Real World Compliance Awareness Success depends each Enterprise becoming Best in Class itself and leveraging the Best in Class capabilities of the Network
  11. 11. Solution: SAP Business Process Platform Flexibility and Stability enabled in the Platform Collaborative Processes Responsive Supply Network Extended across Network PLAN MAKE DELIVER Supply Network Supply Chain Composition Environment Business Process Platform Reusable Components Process Integrity and Composition IT Analytics / Optimization Planning and Execution Operational Excellence Demand Driven Execution Enterprise
  12. 12. So what does this mean to me? What are we doing in SCM to enable this Business Network SCM Transformation Composites Enterprise Service Repository EhP SRM PLM ERP SCM CRM IS SAP NetWeaver
  13. 13. The Roadmap
  14. 14. The Goals for SCM in 2007 Provide new, innovative Solutions nSales and Operations Planning nTransportation Management nExtended Warehouse Management nObject Event Repository and Product Tracking and Authentication nDistributed Manufacturing as part of Supply Network Collaboration nEnhanced Planning functionality in SNP and PPDS Provide an improved User Experience n Duet for Demand Planning n NetWeaver Business Client for Sales and Operations Planning n WebDynpro for Supply Network Collaboration Enable focused Implementations with fast ROI n Componentized SAP SCM & complete SAP SCM Server n Add-Ons to SAP ERP
  15. 15. Releases in 2007 Business Process Area Shipment Deployment Option Date Duet for Demand Planning March Add-On for SAP SCM 5.0 SAP Sales and Operations Planning May Standalone* SAP Auto-ID Infrastructure June Standalone* SAP Object Event Repository SAP Event Management June Standalone* SAP Supply Network Collaboration July Standalone* SAP Extended Warehouse Management July Add-On for SAP ERP 2005 SAP Supply Chain Management August Standalone* SAP Transportation Management November Standalone* *Standalone includes Integration to SAP ERP 2005 and SAP SCM 5.0 (and higher)
  16. 16. Duet: Demand Planning Expand user community for comprehensive planning Utilize the full capabilities of Microsoft Excel as a intuitive planning front-end for SAP SCM § Align plans with customer demand § Presents an intuitive interface with minimum training § Improved user acceptance, usage and productivity
  17. 17. Sales & Operations Planning SAP SOP Tool that consolidates data, provides pre-defined analytics and assists with managing the S&OP process § Monitor and manage S&OP process § Balance demand and supply within financial boundaries § Cross departmental plan - agreed, communice & measure § Identify impact of changing market conditions Sales and Operations Planning SAP SAP SAP ERP SCM BI
  18. 18. SAP APO The central planning application Synchronize supply with demand by balancing push and pull network-planning processes § Improve planning quality and visibility across the network § Optimize supply chain activities to reduce inventory and costs § Secure customer service through state-of-the art sales order confirmation § Integrate with SAP ERP & R/3 - real time planning and execution VMI APO
  19. 19. Supply Network Collaboration SAP SNC Orchestrate multi enterprise processes across suppliers, contract manufacturers and customers § Out-of-the-Box Collaborative Business Processes § Improve Inventory and Requirements Visibility for Accurate Replenishment & Invoicing § Intuitive, Easy to Learn, and Easy to Use Web-User Interface § Standards based & Service enabled Connectivity between your SAP ERP and partner systems Suppliers My Company Customers Contract Mfg
  20. 20. SAP Extended Warehouse Management SAP EWM Enable dynamic movement of goods and value added services § Scalability for constantly increasing warehouse sizes & complexity § Dynamic pull - push principles § Designed to support needs of complex industries - retail, spare parts (e.g. complex return logistics) § Leverage data collection technologies § Improve visibility through analytics and Labor Management § Increase automation by connection to material flow system
  21. 21. SAP Transportation Management SAP TM Transportation planning and execution for Manufacturers and Logistic Service Providers § Support all modes and means of transport § Provides integration and global visibility of transportation process steps § Based on Enterprise Service Object Architecture (eSOA) § Multi-backend system support § Transparency on profitability - buying and selling side
  22. 22. SAP Event Management: In transit Visibility and Track and Trace Enables process visibility, monitoring and control by managing events within and between companies § Track planned vs. actual events at various levels § Automated exception resolution by notification and workflow § Extended process metrics and analytics for performance analysis and compliance § Pre-configured business scenarios
  23. 23. SAP Auto-ID Infrastructure Visibility, Traceability and Automation Platform to enables business processes to leverage real-time RFID and sensor data § Provides business context to RFID & Sensor data § Addresses industry and regulatory compliance requirements § Increase automation, efficiency & visibility, and reduce costs & discrepancies § Local implementation and automated execution of business processes
  24. 24. Conclusions § Companies need to balance efficiency & responsiveness to compete in today's global economy § Leverage your investment in SAP by extended use of components on a unique technology & platform § Make use of Enhancement Package strategy to lower costs and increase flexibility § Invest in new technologies to support growth targets § SAP has the platform and solutions to help you on this business network transformation © SAP 2007-2008 / Page 23
  25. 25. Your Turn! Q&A Vivek C. Sinkar
  26. 26. Customer Success Stories
  27. 27. Success in Supply Chain Planning n Improved service level n Reduced cycle times n Improved visibility of planned orders and capacity n Increased automation n Early detection of bottlenecks and their impact on sales orders n Improved transparency of planning processes n “ Reduced lead times, and interface & monitoring efforts n Optimized production planning n Increased collaboration among production areas n Enabled flexible planning - both self-contained and interactive options
  28. 28. Success in Supply Network Collaboration More than 85% of purchase orders exchanged in collaborative environment Reduced inventory by 17% and increased efficiency Reduced inventory by 50 – 70% Improved on-time delivery by 70% Live in 4 Months, 150 Total Suppliers
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