Sap logistics and order fulfillment strategy

Logistics & Order Fulfillment
Strategy

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

Personalized Solutions
Lot size of One requires Product Networks
52%
of manufacturing companies expect to
be highly vertically integrated in the
next five years

“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
87%
of supply chain officers consider
Internet of Things as important or
interesting technology

Business Strategies
Translating Business Realities to Business Strategies
Customer Centricity
Transform Supply Chain & Logistics into
Demand Networks
Connect Products, Assets & Machines to
Product Networks
Gain real-time network insight to action with
Internet of Things

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

SAP Solution Strategy
Connect your Company Strategy with your Customer & Product Strategy
SAP HANA Platform
Product Networks
Internet of Things
Demand Networks
Customer CentricityPlan
Respond
Deliver
Design
Produce
Operate
Monitor

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

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

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

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

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)

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%

“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

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

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

“ 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

Cargill improving visibility with SAP

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

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

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

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
Logistics Network
Run multimode, domestic, or international
transportation processes in one holistic solution
Manage advanced distribution centers and production
warehouses with optimization capabilities.
Efficient Logistics and Order Fulfillment
SAP HANA Platform

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
Warehouse
Management
Transportation
Management
Mobile Enabled Experience
SAP HANA Platform
Track & Trace

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

Sap logistics and order fulfillment strategy

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