From Supply Chains to Demand Networks – SAP’s
Supply Chain Strategy and Roadmap
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Patrick Crampton-Thomas
VP SAP Supply Chain Solution Management
October, 2014
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 2
The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the
permission of SAP. This presentation is not subject to your license agreement or any other service or subscription
agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related
presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation
and SAP's strategy and possible future developments, products and or platforms directions and functionality are all
subject to change and may be changed by SAP at any time for any reason without notice. The information in this
document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This
document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied
warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational
purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this
document, except if such damages were caused by SAP´s willful misconduct or gross negligence.
All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ
materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates, and they should not be relied upon in making purchasing decisions.
Legal disclaimer
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 3
Supply Chain Needs to Adopt to New Business Realities New methods are required to respond as global supply chains are transforming
into demand networks
Volatile Markets The customer has more knowledge about products and
services than ever before (e.g. Social Networks)
Growing Logistics Complexity The customer expects flexible and speedy delivery of ordered
products (e.g. delivery within the next hour)
Innovative Manufacturing Technologies The customer is demanding individualized products (e.g. print
your food with 3D Printers)
SPEED
SPEED
© 2014 SAP AG. All rights reserved. 4 Internal
Are Supply Chain Organizations Prepared for Demand Networks? Major Challenges for Supply Chain Professionals
Orchestrate the Global Network of Partners Less than ~10% of suppliers are directly connected to their customer’s supply chain
Execute the Supply Chain efficiently About 10% of world-wide GDP is related to logistics spending
Improve Short-Term Planning Results Forecast accuracy for the first week is in average lower than 70%
Manage the Supply Chain in Real Time Only 20% of Supply Chain Professionals have information available within a day
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 5
Supply chains are evolving into product and demand networks
that drive six core processes across the enterprise
Product & Demand Networks Operate
Deliver Produce
Design
Respond
Plan
© 2014 SAP AG. All rights reserved. 6 Internal
SAP Supply Chain Solution Strategy Enable Businesses to Transform their Supply Chains to Demand Networks
Powered by SAP HANA
[THE DEMAND NETWORK]
Response and Supply Orchestration Manage Customer response and orchestrate the supply NETWORK
Logistics & Order Fulfillment The DEMAND NETWORK requires speed & efficiency in Logistics
Demand Driven Business planning Sense & shape DEMAND. Balance DEMAND plans with
NETWORK constraints for profitability
Supply Chain Monitoring Ensure integrity and predict issues of the DEMAND NETWORK
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 7
ma
na
ge
d
clo
ud
public cloud
on-premise
SAP Business Suite
Mobile First Experience
planning network
monitoring
logistics
SAP HANA Platform
SAP Supply Chain Architecture Sketch Simplified and Harmonized Solution Architecture for Demand Networks
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 8
SAP Integrated Business Planning Speeding up the Supply Chain requires a new Supply Chain Planning approach
One Harmonized Data Model Avoid any latency due to integration efforts and leverage the
SAP ERP data model
Cloud First Approach The solutions will be provided in the SAP Cloud but also be
made available on-premise
Mobile First Experience Introduce state-of-the art user experience with communication
capabilities (SAP JAM) and MS Excel Spreadsheets
Built on SAP HANA Demand Networks require real-time monitoring and a focus
on short-term planning
New Planning Algorithm Leverage predictive analytics (e.g. demand sensing)
algorithm in combination with optimization
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 9
Im
Example innovations and roadmap
Market and Consumer
Insight with Demand Signal
Management.
Collaborative Demand
Planning for both simple and
advanced use cases
‘Demand Sensing’ based on
inventory, POS, order feeds
for short term and daily
forecasting and exception
management
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 10
SAP Integrated Business Planning for sales and operations
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Deliver a cross departmental sales and
operations plan balancing the impact on
inventory, service levels and profitability
• Create the optimal business plan to drive
revenue growth and increase market share
• Effectively balance demand and supply and
attain financial targets
• Increase speed and agility of planning and drive
most profitable responses
• Improve forecast accuracy and on-time delivery
through aligned and integrated Business
Planning across short, mid and long term
Demand Inventory Supply
Response
Sales and Operations
Supply Chain Control Tower
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 11
Where does SAP Integrated Business Planning for sales and
operations fit across enterprise planning?
Strategic
Planning
Sales and
Marketing
Operational
Planning
Opportunities,
Promotions
Constrained Qty
Plan Short Term
Plans
Scenario Plans
Constrained Revenue Margin
Projections
Strategic Plans
Sales
Forecast
Financial
Planning
Scenario Plans
Constrained Revenue
and Margin Projections
Strategic
Tactical/Execution AOP, Finance Plan
SAP Sales and Operations
Planning on HANA
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
R&D
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 12
SAP Integrated Business Planning for sales and operations
sample use cases S&OP process management Simulation
Collaboration Dashboard analytics
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 13
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 14
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 15
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 16
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 17
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 18
Key features of SAP Integrated Business Planning for sales
and operations
Social collaboration
Transparent communication,
record decisions
Real-time what-if
scenario planning
Real-time scenarios and
simulation on entire model
Complete scalable
model
Demand, supply chain, and
financial model at aggregate
and detailed levels
Supply
Finance Demand
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 19
Im
Example innovations and roadmap
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 20 This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
How about here? Here? How much inventory here?
Why are we holding Inventory?
Managing complex Inventory decisions
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 21
Integrated Business Planning for inventory benefits
Achieving the right balance between inventory
and service levels
-60%
-40%
-20%
0%
20%
40%
60%
Incre
ase
D
ecre
ase
Fix the mix of inventory for each item at each
location
90% 92% 94% 96% 98% 100%
Inve
nto
ry (
$)
Customer Service Level (%)
Optimal inventory Company current performance
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 22
Im
IBP Solutions integrated with S&OP – Released July 2014
End to End Visibility across
the supply chain for
Performance Management,
Operational Reporting and
Simulation
SCM Event Management,
Serialisation of products and
full Batch Management and
Traceability
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 23
SAP Supply Chain Control Tower
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Enable supply chain professionals to
navigate, analyze and profitably manage the
end-to-end supply chain in real-time
• Increase end-to-end visibility
• Increase on-time delivery performance to
customer
• Decrease overall inventory levels while
reducing risk
• Increase supply chain agility and reduce supply
chain cost
SAP Business Suite
Mobile First Experience
planning network
monitoring
logistics
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 24
SAP Supply Chain Control Tower sample use cases
KPI Library & Dashboards Global visibility & Analytics
Collaboration with Task & Case management
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Alerting to Action
Demo
link
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 28
Key enablers of SAP Supply Chain Control Tower
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
End-to-end monitoring
Comprehensive view of supply chain
current and historical supply chain
performance
Alerts
Quickly identify current and future
potential supply chain problems
Collaboration
Communicate and resolve issues across
functions
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 29
Im
Example innovations and roadmap
Market and Consumer
Insight with Demand Signal
Management.
Collaborative Demand
Planning for both simple and
advanced use cases
‘Demand Sensing’ based on
inventory, POS, order feeds
for short term and daily
forecasting and exception
management
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 30
SAP Integrated Business Planning for demand
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Gain full demand transparency for short-, mid-
and long-term forecasting by leveraging demand
sensing and statistical forecasting methods
• Develop more accurate mid-term statistical
forecasts
• React faster to short term demand changes with
pattern recognition based algorithms to
• Better integrate short term demand planning and
execution
• Respond to demand changes
• Drive more accurate deployment of product
• Collaborate to ensure the most accurate forecast
and manage exceptions
PLANNED
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 31
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 32
IBP-Demand including SAP Enterprise Demand Sensing Sense Short-Term Demand Patterns
Short-term Forecast Issues Increase
Inventory and Reduce Service Metrics Enterprise Demand Sensing – Increase short
term accuracy including daily patterns
Predict daily demand requirements
Apply pattern-based forecasting logic for
shipment and fulfillment
Sense downstream demand using external
data patterns (Planned Innovation)
AVAILABLE (IBP Release 2014)
Forecast patterns
Shipment patterns
Open order patterns
Open order
correction
Predicted future
bias correction
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 33
Im
Example innovations and roadmap
Existing mature and sophisticated supply planning
capabilities within SAP APO
Improved Usability
Order based network planning and production
planning
Available for HEC deployment or On Premise
New Supply planning Capabilities developed as
native HANA applications
Available: IBP-Supply Rough Cut supply
planning (working in conjunction with IBP-
S&OP time series framework)
Planned: New IBP Response and IBP Supply
solutions for advanced order based supply
planning across networks
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 36
SAP Integrated Business Planning for Response & Supply: Order
Based Operational Planning
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Fast, rules-based, demand priority driven supply
planning, allocations planning, and order rescheduling
• Planning & what-if simulation of forecast and order demand
• Order / demand-based prioritisation rules
• Infinite or Finite (priority rules-driven) planning across
supply / manufacturing network for all materials and
resources
• Full pegging and gating-factor analysis
• Generate and provide allocations to ATP for online
confirmations of sales orders
Capable-
to-Match
Backorder
Processing
PLANNED
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 37
Example innovations and roadmap
Combine the best of SAP’s
existing Supply Network
Collaboration Solution with
the network capabilities of
ARIBA’s Business Network
Enable collaborative supply
chain process with both
customers and suppliers
Options for On Premise and
Cloud deployments
SAP Business Network
Supply Inventory Response Demand
Sales & Operations Planning
Mobile First Experience
Supply Chain Control Tower
SAP HANA Platform
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 38
SAP Announces availability of Supply Chain Orchestration
Combine the best of SAP’s
existing Supply Network
Collaboration Solution with
the network capabilities of
ARIBA’s Business Network
Enable collaborative supply
chain process with both
customers and suppliers
Support for all collaboration
partners from simple order
collaboration to advanced
supply chain scenarios with
strategic partners
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 39
Enabling the Best Business Network
SAP Information Interchange
Content Engine
Item
Locatio
n
Party
Business
Partner Profiles
SNC Integrated collaboration
with advanced and broad
Supply Chain Business
processes
Ease of deployment, connectivity and
on- boarding
SAP B2B Supply Chain
Connectivity (ex-
Crossgate Solutions)
Supply Chain Orchestration (SCO)
Communication &
Collaboration
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 41
Accelerated Supplier Onboarding with Ariba Network: On-
Boarding Services, Self-Registration & Unified Supplier Portal
Supplier Self Registration
Logon to Supplier Portal
Ariba Network ~1 million trading partners
across all industries
40+ million Purchase Orders
60+ million Invoices
~$400 billion in spend
142 countries
72 currencies
40 Invoice compliant countries
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 42
Integrated Business Planning, Monitoring & Network Available and Planned Products
Ma
na
ged
clo
ud
(H
EC
)
Public cloud
On-premise (future)
Mobile-Enabled User Experience
IBP for demand IBP for supply
SAP Business Network
IBP for
sales and operations
IBP for response
SAP HANA Platform
IBP for inventory
Supply Chain Control Tower AVAILABLE
AVAILABLE
AVAILABLE AVAILABLE PLANNED
PLANNED
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Integrated Business Planning (IBP)
AVAILABLE
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 43
SAP APO Has Been Significantly Enhanced Recently
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
• SAP APO available on
SAP HANA and HANA
Enterprise Cloud (HEC)
• LiveCache is part of
SAP HANA
• Performance
improvements for many
transactions and
planning runs
• SAP Supply Chain
InfoCenter enables
real-time analytics of
APO data
• Direct access of
LiveCache data with
easy navigation
between SAP APO and
SAP SCIC
• Renovation of Product
View, eBOPI, and
Planner’s Home Page
• Introduction of Fiori
Applications for GATP
Analytics
• MS Excel Add-In for
APO Demand Planning
Performance Analytics Usability
Demand Planning
Supply Network Planning
SAP APO
PP/DS
gA
TP
any
Database
HANA
SAP Supply
Chain Info Center
SAP Enterprise Inventory and
Service Level Optimization SAP Supply Network Collaboration
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 44
Manufacturing Planning & Scheduling – SAP APO PPDS
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
Generate a short- to midterm supply plan /
machine schedule based on orders, WIP,
detailed Material flow definitions
• Support for finite backward- and forward-scheduling
models with constraint-modeling capabilities
• Creates a production schedule considering all capacity
constraints (at multiple levels) and materials availability
• Optimization based on actual constraints to ensure
reliable delivery-due-date promises and to maximize
capacity utilization
• Highly specific sequencing capability (for example, tank
mixing and scheduling, model mix planning &
sequencing)
• Seamlessly integrates with ATP for CTP scenarios
AVAILABLE (HANA Simplification planned 2015)
B-20 C-20 Resource 2
(Finite)
Resource 1
(Infinite)
A-20 D-20
C -10
D-10 B-10
A-10
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 45
Incorporate SAP Integrated Business Planning in phases by
adding incremental value to existing planning solutions
This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement
User Experience
IBP for demand IBP for supply
IBP for
sales and operations
IBP for response
SAP HANA Platform
IBP for inventory
Supply Chain Control Tower
Integrated Business Planning (IBP)
Supply Chain Monitoring
Demand Planning
Supply Network Planning
SAP APO
PP/DS
gA
TP
any
Database
HANA
SAP Supply
Chain Info
Center
SAP Enterprise
Inventory
and
Service Level
Optimization
SAP Supply
Network
Collaboration
+
Flexible roadmap for short, mid and long
term value delivery:
1) Continue APO Roadmap in line with business needs
and value delivery, fully supported by SAP through
2025
2) Extend existing SCM footprint with value-add elements
of IBP and lay the foundation for next generation real
time supply chain. For example SAP Integrated
Business Planning (IBP) for sales and operations, IBP-
inventory and supply chain control tower can be used
with SAP APO, SNC or EIS
3) Further adopt SAP Integrated Business Planning
elements such as IBP for demand and IBP for
response when available
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 46
World class solution for supply chain monitoring, sales and operations planning, demand
management, inventory planning, supply planning, and response management
SAP Supply Chain Platform for Demand Networks
ma
na
ge
d
clo
ud
public cloud
on-premise
SAP Business Suite
Mobile First Experience
planning network
monitoring
logistics
SAP HANA Platform
Contact information:
Patrick Crampton-Thomas
Vice President, Supply Chain Solution Management [email protected]
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 48
© 2014 SAP SE or an SAP affiliate company. All rights reserved.
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These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its
affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or
SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing
herein should be construed as constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or
release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future
developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for
any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-
looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.