Transforming source-to-contract and supplier management processes across strategic spend categories in a global enterprise can be complex. Global manufacturers need to qualify and segment suppliers by region, commodity, plant, and product and enforce that qualification in their direct materials sourcing processes. Learn more about BASF’s shared services strategic procurement initiatives.

1. PUBLIC
Leah Knight, SAP Ariba (SAP)
Dr. Juergen Eberz, BASF
Strategic Procurement at BASF: Transforming
Strategic Supplier Management at a World-
Leading Chemicals Company

2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
 Leah Knight
BASF
 Dr. Juergen Eberz, Senior Manager Procurement
Controlling & Governance
Agenda

3. 3PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba solutions for direct spend
We are making
significant investments
in streamlining direct
materials source-to-
settle processes
Planning
collaboration
Contract
Source
Planning
Design
Manage
ERP and planning
integration
Execution
collaboration
Manufacture
SAP Ariba
solutions for
direct spend
End-to-end
process
management
Total landed
cost
calculation
Collaborative
planning
Collaborative
supply chain
execution
Network
intelligence
Supplier
onboarding
Advanced
negotiation
and supplier
selection
Support for
services and
materials

4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Agenda
4
Agenda
Strategic Procurement Suite
Procurement roadmap – linked to BASF 4.0
BASF at a glance

5. 5PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
BASF – We create chemistry
 Our chemistry is used in almost all industries
 We combine economic success, social
responsibility and environmental protection
 Sales 2016: €57,550 million
 EBIT 2016: €6,275 million
 Employees (as of December 31, 2016): 113,830
 6 Verbund sites and 352 other
production sites

6. 6PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Singapore
Kuantan
Hong Kong
Nanjing
Freeport
Florham Park
Geismar
Ludwigshafen
Antwerp
São Paulo
Regional centers
Selected sites
Verbund sites
Selected research
and development sites
BASF worldwide: sites

7. 7PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Agenda
7
Agenda
Strategic Procurement Suite
Procurement roadmap – linked to BASF 4.0
BASF at a glance

8. 8PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Digital Core Technologies enable BASF 4.0 Solutions
Industry 4.0
Artificial
Intelligence
Big Data
Analytics
Cloud
Computing
Internet of Things
Mobile
Devices
3D Printing*
I0II0I0I0III
0I00I0III0I
I0II0I00II0
Augmented
Reality
Seven core technologies enable Industry 4.0

9. 9PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
BASF 4.0
Fully integrated networks with our partners
Our future: Fully integrated/automated networks with a seamless
information flow between all partners
Technical infrastructure Enablers for networks with our partners
Industry
4.0
3D Printing
Artificial Intelligence
Automated buying (S2C);
Machine learning
Big Data Analytics
Demand planning, visibility
I0II0I0I0III
0I00I0III0I
I0II0I00II0
Cloud Computing
SAP Ariba -
Software as a service
Internet of Things
e.g. sensors trigger
ordering
Mobile Devices
SAP Ariba
Augmented
Reality

10. 10PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Procurement IT tools
Core business requirements & benefits
Full process
integration in
procurement
Many-to-
many global
business
commerce
network
(VIP)
One
source of
truth for
supplier and
legal data
One point of
entry for
buyers,
suppliers
and iBP
Globally
harmonized,
standardized
and
simplified
processes
Transparency
in sourcing,
supplier &
contract
management
(SPS)
Ensure
compliance
in S2C
process
Easy to
use and
understand -
intuitive,
state of the
art frontend
Vendor interaction portal & strategic procurement suite powered by SAP Ariba
allow to optimize procurement
Core business requirements
Strategic sourcing
enabled via
IT-Tool support
“Simplified life”
for procurement
community and
suppliers
Key benefits
Standardized
processes ensure
compliance &
efficiency

11. Create
„network of choice“
 Connectivity provider with
industry know-how
 Include relevant supplier
community and key industry
partners
Industry standard:
Inter-connectedness through hub structure
 Cloud-based industry standard to replace company-specific
legacy systems
 Reduce interfaces = reduce complexity = increase benefits
 Long-term view: Open standard / „Roaming“ to enable
collaboration between different solution providers
No industry standard:
Landscape with
individual connectivity
solutions
BASFSupplier A
Customer B
BASF
Supplier A
Customer B
…
…
Supplier B
Customer C
Yesterday
Tomorrow
Industry standard enhances collaboration with
partners
11

12. Create
network
 Integrate supplier
management, sourcing &
contract management
solutions
 Establish globally
standardized workflows
 Present one face to the
supplier
Today &
Tomorrow
Globally harmonized processes and an integrated system
for strategic procurement
 Enable collaboration between Category Buyers, Suppliers,
and internal Business Partners
 Provide transparency on qualified suppliers, bundling
opportunities, and current contracts
 Minimize risk and increase compliance
Yesterday
S2C: Integrate fragmented tools into one
platform for buyers and suppliers
12

13. 13PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Agenda
13
Agenda
Strategic Procurement Suite
Procurement roadmap – linked to BASF 4.0
BASF at a glance

14. 14PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Six major areas for improvement have been identified in the
current IT set-up
Status-Quo: GR’s IT landscape Key Improvement Areas
▪ Supplier management:
Supplier evaluation tools usage
limited
▪ Sourcing:
Auctioning/E-bidding tools
usage limited
▪ No globally standardized
workflows established
▪ There are special tools only
used in specific regions
▪ Many catalog systems
▪ One-face to the supplier not
established
1
2
3
4
5
6

15. 15PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
In 2018, the IT landscape will be leaner, globally standardized, and
provides one professional interface to suppliers across the globe
2018: GR’s IT landscape Key Improvements
 Through SAP Ariba solutions, we
want to reach a new level of
connectedness
 State-of-the-art
business-to-business
connection
 Standardized software in the
cloud facilitates cost efficiency
and a marketplace for the
suppliers
 SPS: One solution for the buyer
to manage the supplier
 One catalog enables efficient
search and supplier connection
*

16. 16PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Revolution of the buyer’s life
every-time
every-
where
every-
one
§
order
agree-
ment
terms
…
???
???
???
status
approval
date
extent
??
idea
idea
knowledge
idea
experience
???
???
???
???
???
SUPPLIER
BASF
Ensured
compliance
Simplified
processes
Lived idea and
knowledge exchange
Transparency,
one source of
truth, sourcing
excellence
Simplified data
exchange
Target simplify buyer’s life & increase time for value-creating
activities

17. SMS: Supplier Management and Source-to-
Contract
Enable the implementation of optimized and globally
standardized strategic procurement processes
SPS: Strategic Procurement Suite
Supplier Management, Sourcing and Contract Lifecycle
Management with SAP Ariba solutions
IT enablement of standardized processes
(“one global tool”)
The SMS project provides the framework for the SPS
implementation
17

18. 18PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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Strategic Procurement Suite for indirect and direct procurement
with ERP interfaces
Process Scope Deliverables
▪ Increase of Effectiveness
▪ Increase of Efficiency
Contract Lifecycle Mgmt. (CLM)
▪ Creation & Negotation
▪ Distribution
▪ Monitoring
▪ Administration
Sourcing (SO)
▪ RFP/RFQ
▪ Bid evaluation
▪ Negotiation
▪ Auctioning
▪ Awarding
Supplier Management (SM)
▪ Registration
▪ Qualification
▪ Segmentation
▪ Performance Management
▪ Development & Interaction
▪ Disqualification / Phase-out
▪ Globally aligned
processes & integrated
system for strategic
procurement
▪ Global standard tool,
rolled out in all regions
▪ KPIs for Supplier
Management and S2C
Expected benefits

19. 19PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
How SPS and VIP fit into the digital procurement landscape
Supplier
Management
Sourcing Purchase-to-PayBASF
Registration
Qualification
Evaluation
RfQ
Bidding
Awarding
Purchase Order
PO Confirmation
Invoice
Marketing, Sales,
CRM
Marketing, Sales
Sales Order Mgmt.,
Acc.Receivable
Supplier Marketing, Sales
Registration RfQ Purchase OrderCreation
Qualification
Bid evaluation PO Confirmation
Red Lining
Red Lining
Pricing
Contract
Management
Evaluation
Awarding Invoice
Monitoring
Price updatesDevelopment
Development
SAP Ariba Supplier Network
SAP Ariba
Supplier Network

20. 20PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Key takeaways …
Digital business interaction through Strategic Procurement Suite:
 Harmonizes across categories (direct/indirect/packaging) the tool
landscape
 Enables a global network to collaborate for S2C process
 Permanent (every 2-3 months) best-in-class new functionalities
 Integrated into SAP R/3 backbone
 Harmonization, standardization and automation of processes for various
internal functions and external suppliers
 One UI for all strategic functions in procurement
 Ensure usage of one globally aligned set of standards
 Improved accuracy of data
 Provide set of KPI for strategic topics like supplier management or sourcing

21. 21PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Questions?

22. 22PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Which session to join next? Don’t miss these breakout sessions on direct spend supply chain,
sourcing, and supplier management!
16:00: SAP Ariba product
strategy roadmap for
2017 (SID 50650)
Direct spend use
case
Wednesday 14 JuneMonday 12 June Tuesday 13 June
11:00: ThyssenKrupp’s Procurement
transformation in direct spend (SID 50631)
13:45: Extending Your SAP Supply Chain Systems to Suppliers
with SAP Ariba Solutions for Direct Spend (SID 50958)
14:45: Strategic procurement transformation at BASF
(SID 50632)
15:45: Innovations in product sourcing
(SID 50658)
16:45: Discovering SAP Ariba Solutions for Direct Spend with
Ariba’s Product and Innovations leadership team (SID 50634)
9:00: SKF and Avery Dennison:
sourcing multiple spend categories in a
single platform (SID 50633)
10:15: Strategic sourcing workshop
(SID 50679)
12:00: SAP Ariba Strategic Sourcing design to
execution end to end (SID 50963)
9:00: SAP Ariba Strategic Sourcing:
multi-level BOM, simple RFx
(SID 50965)
14:15: SAP Ariba Supply Chain Collaboration
(SID 50962)
10:00: SAP Ariba Supply Chain
Collaboration: manage your supply
chain by exception (SID 50964)
Direct spend use case
OR
Direct spend use
cases
17:15: Ariba Network:
supply chain today, vision
2017 and beyond
(SID 50558)

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