Transform Supply Chain & Logistics into Demand Networks Planning Matters: Issues: Demand Plans are aggregated which leads to low forecast accuracy, increased stock transfer orders and increased inventory in the network. Also, Sales & Operations Planning processes are disconnected from the execution which leads to a delay of executing decisions and increased cost. And finally inventory targets for product-location combinations are kept static instead of dynamically adjusting them according to demand and supply volatility Solution: introduce 3 dimensional planning: plan with financial and supply chain numbers, combine short- and long-term forecasting and connect tactical with operational planning with inventory & service level optimization Be Accessible: Issues: One of the biggest issues to introduce speed into the supply chain is the missing connectivity with supply chain and logistics partners. Communication is done via e-mail and spreadsheets, which leads to increased inventory (to cover the risk) and delays. Furthermore point-to-point connections are hindering to increase flexibility to make fast decisions Strategy: Leverage Business Networks instead of costly point-to-point connections. Make it easy to connect, increase flexibility and take risk out of the supply chain Fulfill to Please: Issues: Same-day shipments become the norm, especially in end-consumer related industries. Cost in Logistics are raising and the complexity is ever increasing. Warehouse and Transportation processes need to interact more closely for fast delivery. Efficiency in Warehouse Management lags 10 years behind the efficiency in Manufacturing (according to Gartner) – more automation will be introduced (robotics, augmented realities, etc) Strategy: Efficiency in transportation and distribution requires connectivity, end-to-end visibility and a strong focus on cost

1. Logistics & Order Fulfillment
Strategy

2. Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
Social Media
CatalogsWeb Sites
Mobile
Smart Devices
Kiosks
Retail
Customer Centricity
Multi Channel Strategy requires Demand Networks
45%
of enterprises are building direct-to-
customer fulfillment capabilities
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 2Confidential

3. Personalized Solutions
Lot size of One requires Product Networks
Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
52%
of manufacturing companies expect to
be highly vertically integrated in the
next five years
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 3Confidential

4. “Help the world run better and improve people’s lives”
“To help people save money so they can live better.”
“…charting the course for a stronger, more sustainable future...”
“…dedicated to…enriching people’s lives”
“…to create a more prosperous society…”
Improve People’s Lives
Speed to fulfill individualized customer demand requires Internet of Things
Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
87%
of supply chain officers consider
Internet of Things as important or
interesting technology
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 4Confidential

5. Business Strategies
Translating Business Realities to Business Strategies
Customer Centricity
Transform Supply Chain & Logistics into
Demand Networks
Personalized Solutions
Connect Products, Assets & Machines to
Product Networks
Improve People’s Lives
Gain real-time network insight to action with
Internet of Things
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 5Confidential

6. Demand Networks
Transform Supply Chain & Logistics into Demand Networks
Planning Matters
Aggregated demand leads to short-term forecast accuracy < 70%*
Business Concept: 3 Dimensional Planning
Be Responsive
< 10%* of suppliers are directly connected with their customer’s supply chain
Business Concept: Business Networks
Fulfill to Please
About 10%* of world-wide GDP is related to Logistics spending
Business Concept: Connected Logistics PLAN – RESPOND – DELIVER
*Source: Several SAP Benchmarking Reports and Industry Analyst Reports
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 6Confidential

7. SAP Solution Strategy
Connect your Company Strategy with your Customer & Product Strategy
SAP HANA Platform
Product Networks
Personalized Solutions
Internet of Things
Improve People’s Lives
Demand Networks
Customer CentricityPlan
Respond
Deliver
Design
Produce
Operate
Monitor
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 7Confidential

8. Demand Networks
Customer Centricity – Demand Networks – Plan/Respond/Deliver
 Sales, Inventory and Operations Planning
 Demand Management
 Demand Network
 Response and Supply Management
 Production Planning and Scheduling
 Response Network
 Warehouse Management
 Transportation Management
 Logistics Network
managedcloud
public cloud
on-premise
Plan Respond Deliver
SAP HANA Platform
SAP Business Suite 4 HANA
Plan Respond Deliver
Real-time Network Insights
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 8Confidential

9. Increasing market volatility
Major shifts in customer demand volume,
increasing regulations, new competitors
Escalating customer expectations
Customer is demanding high-quality, flexible
delivery becoming the #1 logistics objective
Declining logistics performance
Impact of disruptive events and technology
changes while cost budgets stay the same
The role of logistics is changing
Global business drivers impacting logistics
Complexity
Delivery
Performance
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 9Confidential

10. Major challenges for logistics and distribution
Cost pressure
Logistics cost average 10% of revenue and are still increasing,
bearing optimization potential
Transparency remains vague
Logisticians require process control along with real-world based
insights for rapid and effective decision making
Isolated operations at logistics partners
Manufacturers, freight forwarders, carriers and retailers operate
independently
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 10Confidential

11. Strategies for logistics and order fulfillment
Logistics optimization
 Translate constraint-based manufacturing and inventory optimization to logistics
capacities
 Differentiate in logistics with planning and response management
 Evolve from goods fulfillment to e-commerce business
Real-time insights and control
 Connect logistics to the internet of everything for business
 Simplify material flow and increase warehouse efficiency
 Provide insights into the network for effective and responsive decisions, and execution
Logistics connected
 Orchestrate strategic and medium-term planning for manufacturing companies,
freight forwarders, carriers and retail companies on one platform
 Determine best mix of carriers to meet business goals
 Sense and respond to logistics insights
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 11Confidential

12. Strategies for Warehouse Management
Introduce optimization techniques
 Slotting and constrained-based planning in the warehouse
 Warehouse layout optimization
Increase warehouse efficiency through Internet of Things
 Augmented reality for warehouse workers
 Material flow system and warehouse automation
Simplify material flow
 Seamless flow between Make and Deliver through production warehouse
 Handle returns as volume business (up to 30% in e-commerce)

13. Optimize warehouse and distribution
operations by combining optimization
techniques with the end-to-end logistics
process across a warehouse
Dock Appointment Scheduling
Manage the inbound and outbound flow to and
from warehouse dock doors. Reduce delays
and fees from carriers and increase service
levels. Maintain and update appointment with
carriers.
Warehouse Management
Optimize processes, resources and assets in
the warehouse. Manage quality, safety,
automation, inventory in end-to-end process
optimization combined with state-of-the art
analytics.
Lower customer order cycle time
Where picking, packing, and shipping are automated
More orders shipped on time
Where warehouse process is optimized based
on shipping times
6%
48%
Warehouse Management
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 13Confidential

14. “We deployed SAP EWM at five large sites. It has helped us raise productivity, reduce costs,
improve the customer experience, and become a safer place to work. We are seeing less
travel time, fewer unnecessary exits from the forklifts, shorter loading and unloading times,
and a more accurate order picking process.”
Venkat Paruchuri, Director of Supply Chain IT, Dr Pepper Snapple Group
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 14Confidential

15. Strategies for Transportation Management
Introduce optimization techniques
 Optimize asset positioning through transportation resource planning
 Load planning and optimization
Differentiate with planning and response management
 Real-time strategic planning and simulation of distribution networks
 Synchronize capacities between shippers and service providers
Operate on one supply chain execution platform
 Orchestrate strategic and medium-term planning for manufacturing companies,
freight forwarders, carriers and retail companies on one platform
 Provide insights into the network for effective decisions and execution
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 15Confidential

16. Enable companies to better meet
transportation demands with
streamlined processes, decreased
costs, improved compliance and
flexibility
Freight Planning and Optimization
Optimize and balance freight costs and constraints.
Transportation Requirements Management
Centralize transportation requirements management,
from entry to final settlement.
Freight Tendering
Create an automated environment for freight tendering.
.Carrier Booking
Automate a collaborative environment for carrier
booking.
Lower spend
When transportation is integrated with
SAP ERP and partners
Less invoice errors
With automatically calculated and
distributed costs
13%
22%
Transportation Execution and Monitoring
Execute and monitor transportation and planning
Freight and Forwarding Settlement
Manage and settle freight agreements for carriers
and customers.
Transportation Management
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 16Confidential

17. “ We have been quick to realize the benefits of SAP software, and our customers have
responded positively. SAP Transportation Management and SAP Event Management
have given us a competitive advantage in a challenging market, and we are confident
they provide the ideal platform to drive future growth.”
Paul Momege, IT Director, Norbert Dentressangle, Freight Forwarding Air & Sea Division
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 17Confidential

18. Cargill improving visibility with SAP
Transportation Management
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 18Confidential

19. Strategies for Logistics Networks
Sense and respond to logistics insights
 Alert stakeholders and adapt business processes
 Real-time reporting, analysis for insight-into-action and risk mitigation
Manage freight strategically
 Determine best mix of carriers to meet business goals
 Monitor compliance with agreements for both sell and buy side
Connect logistics to the internet of everything for business
 Increase utilization and goods throughput with real-time location services
 Accelerate delivery times with reduced waiting times and automated monitoring

20. Deliver the best-possible carrier
services with improved freight
contracting, holistic partner
collaboration and transparency.
Strategic Freight Management
Forecast and assess future transportation
requirements. Request bids from carriers
to address transportation needs, and
negotiate contracts and agreements with
carriers.
Sense and respond to logistics insights
Provide complete tracking of goods and
assets in transit across the entire supply
chain, allowing quick resolution of issues,
lower operating costs, and limiting excess
inventory.
Less transportation spend
Where forecasts are dynamic and updated
frequently
Fewer unplanned costs
Through visibility into in-transit and network-
wide inventory
20%
9%
Logistics Network
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 20Confidential

21. 21© 2014 SAP SE or an SAP affiliate company. All rights reserved.
“Our aim is to gradually
interconnect all modes of
transport – from waterways and
roads all the way to the railway”
Hamburg Port Authority - steering course
for the connected port of the future
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 21Confidential

22. Balance customer service and delivery
costs for greater speed, efficiency, and
sustainability
Logistics Network
Enable cross-company coordination of logistics with
strategic freight management and collaboration.
Efficient Logistics
& Order Fulfillment
Warehouse Management
Transportation Management
Logistics Network
Transportation Management
Run multimode, domestic, or international
transportation processes in one holistic solution
Manage advanced distribution centers and production
warehouses with optimization capabilities.
Warehouse Management
Efficient Logistics and Order Fulfillment
SAP HANA Platform
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 22Confidential

23. Integrating and connecting logistics
Real-time insights
and control
Optimization Connected
Logistics platform
Warehouse Management, Transportation
Management and Track and Trace converged on one
platform
Business suite integration
Logistics seamlessly integrated to financials, order-
to-cash and procure-to-pay
Logistics network
Orchestration of collaboration between logistics
partners, and track and trace in the internet of things
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 23Confidential
Warehouse
Management
Transportation
Management
Mobile Enabled Experience
SAP HANA Platform
Track & Trace

24. Logistics and Order Fulfillment
Roadmap
Recent innovations Planned innovations Future direction
Warehouse
Management
• Advanced production
receipts/staging
• Multi-deep storage
(for automation)
• Transit warehousing
• Warehouse billing
• E-Commerce, B2C
and retail focus
• Optimization and
increased efficiency
Transportation
Management
• Manual Planning with
Gantt Charts
• SAP HANA
Smart business
• Collaboration portal
• Focus on logistics
service providers
• Transit warehousing
• Transportation
resource planning
• E-Commerce, B2C
and retail focus
• Accelerated Supply
Chain convergence
Logistics Network
• Connected Logistics
through the Internet
of Things
• SAP HANA
Smart Business
• Broaden footprint of
Internet of Things
solutions
• Supply Chain
Orchestration
integrating Logistics
Network
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 24Confidential

25. Thank you!