SNC02 Roadmap Supplier

Collaboration
Consulting service to evaluate and prioritize
supplier collaboration processes developing a
customer-specific project roadmap
 Agenda

1. Situation at the Customer, Starting Point

2. Service Description
3. Benefits for the Customer
4. Appendix

© SAP 2008 / Page 2 customer

 Situation at the Customer, Starting Point

Customers who practice supplier collaboration processes but would like to

improve the scope, organization and the current application platform in place to
support the SC business processes

Customers in the definition phase of supplier collaboration business processes

who would like to structure the mid- to long-term project roadmap and IT architecture
to implement and support SC

© SAP 2008 / Page 3 customer

 Agenda

1. Situation at the Customer, Starting Point

2. Service Description
3. Benefits for the Customer
4. Appendix

© SAP 2008 / Page 4 customer

 Service Description (1/2)

The definition and periodic review of a roadmap for supplier collaboration is

structured as follows:
Preparation: Scope and organization of the roadmap development are defined and the
workshop schedule is set up.
Identification: As-is SC process verification is done based on the to-be SC processes
identifying potentials and relevant KPIs
Focusing: Based on potential analysis, the relevant processes are mapped into SAP‘s
solution portfolio. Strategic relevance and value contribution are determined. Changes to
current organization and IT architecture are identified
Roadmap development: Content, dependencies and sequence of building blocks are
consolidated in the Strategic roadmap for supplier collaboration
Realization coaching: Verify and adjust roadmap based on business-, IT- and external
impacts and secure quality of the roadmap implementation

© SAP 2008 / Page 5 customer

 Service Description (2/2): Strategic Roadmap
Development for Supplier Collaboration

Roadmap Realization
Preparation Identification Focussing
development coaching

Prepare & hold Trends in the area Mapping of Determine project Verify and adjust
preparation of SC customer SC roadmap content roadmap based
meeting Verify as-is processes to Identify on business-, IT-
Define required processes in SC SAP’s SC dependencies of and external
project resources at customer solutions roadmap building impacts
& structure Discuss Impact analysis on blocks Secure quality of
Agree on scope customer’s as-is processes, Determine roadmap
and level of detail business drivers organization and sequence of implementation
applications building blocks
Define workshop Potential analysis
schedule of customer as-is Determine value Roadmap set-up
processes and contribution of SC Define
Prepare kick-off
organizations in processes organization to
meeting
SC Identify strategic implement
Identify relevant relevance of SC roadmap
KPIs for as-is processes Collect relevant
processes Determine future change
Identify impacted IT architecture management
IT applications and evaluate topics
alternatives

1 day 1–3x 2-day on- 2–6x 2-day 1–2x 2-day on- Quarterly 2-day/
site workshops on-site workshops site workshops monthly 3-day
proposal

reviews

© SAP 2008 / Page 6 customer

 High-Level Processes of Supplier Collabora-
tion That Are Basis for Roadmap Development

Design & Billing &

Strategic Procurement
1 2 Product Live- 3 4 Fulfillment 5 Dispute
Sourcing Planning
cycle Mgmt Management
Objectives

Establish long- ‚Make or Buy‘ Determination replenishment of Invoicing of

term sourcing Integration of and execution of external parts material and
relationships supplier in planning strategy from seller to services
Evaluation product for external buyer involving Dispute
(external and development live procured parts supporting management in
internal data) cycle parties (LSPs) case of issues
processes
Business

Supplier Price & Engineering Contract Collaborative Order-based 3PL Dispute

E-Invoicing
discovery Products Change Mgt. Management Forecasting collaboration integration Management

Supplier New Product Design New Product Product live- Demand-based Replenish- Returns
Evaluation Development collaboration Introduction Cycle Mgt. Collaboration Ment exec. management
I-layer

Biz.
Biz. Systems Exchg. Channels
Objects Services
Partner Standards
Solutions

ERP SCM SRM BI PLM xAPPs EP XI

© SAP 2008 / Page 7 customer

 Results Along the Roadmap Definition

What should be im- Business process Enterprise Implementation

plemented? How? prioritization Structure Roadmap
Solution Design & Projects, Effort
Process Prioritization Applications in Regions
SCM Biz. Processes Sequence, Releases

Value SCM Applications

contribution

Regions
Strategic
relevance

Periodic evaluation of solution clusters for suitable system landscape(s) supporting SC

Solution cluster 1 Solution cluster 2 Solution cluster n

© SAP 2008 / Page 8 customer

 Service Offering: General Information

Consulting effort [MD]:

Effort estimate based on what level of investigation the customer likes to develop the
roadmap, on a fixed price

Internal effort customer:

IT: % based on external effort
Business: % based on external effort

© SAP 2008 / Page 9 customer

 Result Example – Process Weaknesses and
Improvement Areas

As-is To-Be
CPI* Process CPI* Process
Documentation templates Documentation templates
Processes

Transition

Main Process areas Main Process areas

and Architecture** and Architecture**

Transition
Architecture

Interface Interface
Documentation Documentation

Transition

* Customer process innovation, ** Process content provided by SAP Consulting based on CPI initiative
© SAP 2008 / Page 10 customer
 Result Example – Prioritization of Supplier
Collaboration Topics

Central fields of activity to 1 Strategic Sourcing

improve value-contribution of SC processes Improved transparency by centralizing
purchasing contracts and volumes
Introduction to auctioning and bidding
easy

2 Design & Product Live Cycle Mgmt

2 Collaboration of documents for purchased
5 parts with business partners involved into
Simplicity of implementation

inbound procurement and outsourced

3 manufacturing
Less errors in outsourced manufacturing
4 processes due to transparency in
Engineering change management with
1 subcontractors

3 Billing & Dispute management

Lower process costs improving invoicing
and ERS with suppliers

4 Fulfillment processing
complex

Improved planning by Transparency of

SIT
Less labeling errors
low Strategic relevance high
5 Procurement Planning
Less process costs by improved
collaboration processes
= Size equals value-contribution potential Reduction of troubleshooting
© SAP 2008 / Page 11 customer
 Result Example – Value Contribution
Improvement of Focus Areas

Type KPI Low* Avg* Impv.* Calc. Basis Area of Improvement

One Reduced Inventory - One 21,8 32,7 10-15 % 217,9 (AR) Einmaleffekt durch Reduzierung laufender
Time Time Bestände
Annual Reduced Inventory 3,3 4,9 10-15 % 15 % = 32,7 Reduzierung durch akkurate
Carrying Costs Mio Material SAP SCM der
Bedarfsvorhersage und Transparernz
(re-) Handling APO (RT)
Bestände
and COC
Demand- &
Annual Reduced Obsolete 1,3 2,0 20-30 % 3 % = 6,5 m Akkurate Bedarfsvorhersagen
Supply und
Inventory (Abschreibung) bedarfsgerechte Produktion
Planning
Annual Improved Planning 1,0 1,2 25-30% 60 FTE = 3,9 m Standardisierte und automatisierte
Productivity (65K each) Prozesse
SAP SCM
Annual Reduced Transportation 3,6 7,2 5-10% 5% = 72 m Reduzierung von Premiumkosten durch
Costs Total Trans cost
SNC
akkurate Bedarfs-vorhersage und weniger
Supply
Ersatz-lieferungen SAP SCM
(Returns) aufgrund
Network Execution
schlechter Qualität
Annual Reduced Manufacturing 14,1 23,5 3-5% 470 m Collaboration,
Erhöhung der Transparenz bzgl.
Cost by better Planning & Manufacturing Fertigungskapazitäten
Outsourced und Bestände über
Visibility Cost globales Netzwerk
SAP (inkl.
SRMPartner)
Manufacturing
Annual Reduced Direct Material 4,0 8,1 1-2% 400 m (ca. 25% Supplier
Ausnutzung von bspw. Mengendiscouts
Spend Revenue) sowie Einhaltung vonRelationship
Lieferzeiten durch
Prozessstandardisierung
Management
Annual Procurement Staff 1,4 1,7 10-12% 250FTE = 14 m Standardisierte und automatisierte
Efficiency (55K each) Prozesse im Einkauf

* outside-in approach, e.g. by using benchmarks, etc.

© SAP 2008 / Page 12 customer
 Result Example – Customer-Specific Project
Roadmap for SC

<year> <year>
J F M A M J J A S O N D J F M A M J

Improve SC processes
Introduce SRM central contract mgmt
Introduce outsourced mfg. with SNC &
cFolders

Improve system architecture

Upgrade SCM systems
Harmonize supplier relevant data

Global roll-out
Roll-out region 1
Roll-out region 2

today

Legend: Duration Milestone

© SAP 2008 / Page 13 customer

 Agenda

1. Situation at the Customer, Starting Point

2. Service Description
3. Benefits for the Customer
4. Appendix

© SAP 2008 / Page 14 customer

 Benefits for the Customer

Identify the benefit areas of supplier collaboration within the customer purchasing
organization
Structure implementation projects and highlight dependencies to other building blocks in a
strategic roadmap
Channel the customer‘s focus areas
Enable customer to „sell“ an SCM project internally providing dates, figures, outside-in
value proposition
Mid-term guidance of customer activities in the area of supplier collaboration

© SAP 2008 / Page 15 customer

 Agenda

1. Situation at the Customer, Starting Point

2. Service Description
3. Benefits for the Customer
4. Appendix

© SAP 2008 / Page 16 customer

 Thank you!

© SAP 2008 / Page 17 customer

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