business networks in supply chain management - … manning.pdf · business networks in supply chain...

Barry Manning, Business Development Manager APJ - May 25, 2016

Business Networks in

Supply Chain Management

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2

• SAP Ariba

• Customer Challenges in Supply Chain - visibility, complexity, cost

• How can Business Networks support end-to-end Automated Supply Chain Collaboration solution

• Quantify the benefits of an Automated Supply Chain Collaboration solution

Agenda


The Digital Framework to Run Simple, Run Live

Through organic innovations, partnerships and strategic acquisitions over $30 Billion SAP has the best solution portfolio and expertise required to enable your organisations continued digital transformation in collaboration with SAP.


Business Scope SAP Ariba addresses all spend categories across the source to pay lifecycle

Customer ChallengesSupply Chain Visibility, Complexity, Cost


Increasing Globalisation Expansion into new markets

Global process standardisation

International supply chains

Increased off-/near-shoring

Economic Volatility Volatility in markets

Decreased stock valuation

Slow economic growth

High expense ratio

Pressure on Margins Pricing pressures

New sources of competition

Decreased budgets and spending

Greater Risk Supply chain disruption

Financial risk and fraud

Commodity risk

Accelerating Technological Changes Changing business models

Faster innovation cycles

Expanding partnerships and channels

Leveraging big data for decisions

Regulatory Constraints Increasing disclosure requirements

Country- and industry-specific regulations

Environmental requirements

Speed to Market Shortened selling cycles

Delivery driven by demand

Fast turnaround needed to respond to market opportunities

Category Complexity Detailed specs & design requirements

Extensive supplier qualification

Many line items and pricing variances

Changing Business EnvironmentIncreasing Pressures on Supply Chain and Procurement Functions


Manual

Internal Processes Not Efficiently Integrated With Supplier BaseMultiple Outdated Supplier Collaboration Tools

Supply Chain Collaboration

Enterprise Portals EDI VANs Direct Connect

Challenges

High maintenance cost

of multiple – often highly

customised and outdated

– solutions

Different – often clunky

– systems make it

difficult and time-

intensive to use

Supplier resistance to

proprietary technology that

addresses only fragments of

the collaboration challenge

Costly and time-consuming

supplier onboarding causes

limited, incomplete supply

chain collaboration


Traditional Linear Supply Chains Increasing in Levels of Complexity

Consignment/Forward Stocking

Contract Manufacturing

Traditional

Customer Manufacturer Suppliers


outsourcing | trading partners | to track | geographies | technologies

Contractmanufacturers

Subassembly suppliers

Large

enterprise

OEM

Component suppliers

Raw material suppliers

Complex Manufacturing Supply Chains Inhibit Visibility Into Supply


Distribution centers

Brand owners

Complex Retail Supply Chains Inhibit Visibility into Supply

More outsourcing

More trading partners

More to track

More geographies

More technologies

Consumer

Consumer packaged goods

supplier

Logistics provider

Packagingsuppliers

Retail stores

outsourcing | trading partners | to track | geographies | technologies


Lack of visibility hits top and bottom line

of manufacturing is

outsourced in a typical

company

of buyers have poor

visibility into

source of supply

of suppliers lack visibility

into customer

order management

32%

65%

70%“Supply chains…need visibility across multiple

systems to synchronize manufacturing

and procurement.”

Without visibility, complex supply chains risk:

HIGHSAFETY STOCK LEVELS

HIGHINVENTORY CARRYING COSTS

STOCK-OUTS

SHIPMENTS

MISSED or DELAYED

&

Source: Supply Chain Insights 2014


Business Networks Integrate Your Inside World With Your Outside World

EDI

Email

Fax

Portal

Traditional Model

Complex optimisation inside the four walls, but limited coordination with you external partners.

Business Network Model


EDI

Email

Web UI

cXML

Paper

Smart PDF

CSV

xCBL

* Supply Chain/Direct Material Extensions ** Some limitations exist

Connect Once for End-to-end CollaborationSimplify Connectivity with Standardized Integration

any vendor | ERP | protocol any level of sophisticationall suppliers | processes |

geographies** | spend

Open Comprehensive Adaptable

Intelligenceautomated | real-time |

Big Data-driven


Automated Collaborative Supply Chain Solutions Deliver Strong Efficiencies and Tangible Benefits

Savings

Impact Area Savings Opportunity

Supply Chain

Process

Improvement

• Reduced time scheduling and planning complex orders.

• Reduced time overseeing contract manufacturers and drop ship

suppliers.

• Reduced time tracking rescheduling and verifying changes.

Inventory Cost

Take-out

• Reduce idle materials (wrong balances or obsolescence).

• Reduce on hand materials (compressing supplier order cycle

times).

• Reduce finished goods inventory (production and in transit

delays).

• Re-allocate working capital to revenue generating programs.

Inventory Carrying

Cost Reduction

• Reduce the interest expense, reducing the cost of goods sold for

housing unneeded inventory.

EDI & Coll Cost

Reduction

• Eliminate Hardware/Software Maintenance and Support

(translator, config, mapping, etc.).

• Transaction Fees.

Based on Ariba’s benefits modelling, your Company can save every year in operating expenses, increase productivity

and reduce working capital.

Inv. Take-out, $MSC Process Improvement

EDI Cost Reduction, $KInventory Carrying Costreduction, $M

Thank you

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