sap supply chain day - markus rosemann sap

Time to Rethink your Supply Chain Patrick Crampton-Thomas, Head of Center of Excellence SCM

EMEA, SAP

Markus Rosemann, Solution Management Director Supply Chain

Execution, SAP

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2

Values are

Changing

• Awareness – health, wellness, safety,

• Accesibility (Mobile, Home, Store…)

• Demand Value, Quality & Service

Channels are

Evolving

• Local brands trusted by consumers

• Rapidly evolving channel complexity

(B2C, C2C, Direct, Indirect…)

Segments are

Emerging

• Urban elite, middle class, upwardly

mobile, rural poor

• Radical different GTM by segment

Energy • Energy spiraling costs

• Biofuels pressuring commodity

availability & pricing

Volatility • Climate affecting food and commodity

availability and price

• Increasingly scarce Resources

• Dynamic markets and competition

Industry Challenges driving Supply Chain: Understanding the customer


Industry Challenges Driving Supply Chain: Changing Supply Dynamics

Boeing

70% work done by 50 partners

Innovation to Co-Innovation

Supply Chains to Global Supply Networks

Automotive Industry

80% of Value Creation will

come from Suppliers

Consumer Products P&G has declared that half of

all new products should

originate outside of P&G

Pharmaceuticals

Bristol Myers Squib to reward

managers equally for

innovation that comes from

the “outside”


An Analyst View: Common themes from 23/25 SAP

Supply Chain customers ranked leaders

Performance:

• Rolling Out Best

Practices

Advanced Supply Chain

lnnovation in:

• Segmentation; End to

End & Multi Tier

Network & Cost

Visibility; Supply

Network Optimisation

Growth:

• Supply Chain as

driver for new

smarter growth

© 2013 SAP AG. All rights reserved. 5 Internal

Control the Supply Chain in Real Time

Only 20% of Supply Chain Professionals have information available

within a day to manage their supply chain*

Orchestrate the Global Supply Network

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

Volatile Markets & Growing Logistics Complexity Constant Challenges for Supply Chain Professionals

*Aberdeen Group, January 2011


Rethink your Supply Chain Treat “Exceptions” as “Standard”

Frequently build and adjust

profitable business plans across

departments and companies

Rethink Collaboration

Introduce fast and lean demand

& supply planning processes

Rethink Operations

Know the demand for all

products in all markets at any

time

Rethink

Responsiveness

Rethink Supply

Chain Monitoring

Transition to “on-demand” shipment

in combination with local, small

distribution centres

Rethink Distribution


SAP is Rethinking the Supply Chain SAP Supply Chain Management Solution Requirements

Provide highly collaborative

processes in the Cloud

ORCHESTRATE

Provide industry specific

planning and logistics

capabilities

EXECUTE

Provide enticing User

Experience, including

Mobile

USABILITY

Provide analytics and

simulation to control the

supply chain

CONTROL

Introduce the Real-Time

Supply Chain with SAP

HANA

REAL-TIME


SAP’s Strategy for Supply Chain Customer Centric, Real-Time Supply Chain Orchestration

Logistics & Order Fulfillment Powered by SAP HANA

Sales & Operations Control Tower Powered by SAP HANA

Demand

Management Powered by SAP HANA

Manufacturing &

Supply Planning Powered by SAP HANA

CONTROL

ORCHESTRATE

EXECUTE


SAP Supply Chain Management Solutions End-to-End Business Process Coverage

SALES & OPERATIONS BUSINESS PLANNING

Sales & Operations Planning, Inventory & Service Level Optimization, Scenario Planning

DEMAND DRIVEN SUPPLY CHAIN

Demand Management, Collaborative Response Management, Manufacturing & Supply Planning

LOGISTICS & ORDER FULFILLMENT

Transportation Management, Warehouse Management, Track & Trace

SU

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OR

ING

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ICE

SU

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LY

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AIN

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PP

LY

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AIN

VA

LU

E M

AP


SAP Innovations

80% Of decision makers think access to the

right information at the right time is

critical to their business Source: SAP Performance Benchmarking

Applications SAP HANA Mobile Analytics Cloud


SAP Leadership in Supply Chain Innovation

Q2 2012 Q4

•SCM on

Hana

-APO

-SNC

MRP on

Hana

New Foundation on Hana

S&OP on

Hana

Demand

Signal Mgt

Global Batch

Traceability Supply

Chain Info

Center

Landed

Costs

Analysis

Inventory

Visibility





Demand


Manufacturing &


CONTROL

ORCHESTRATE

EXECUTE


Providing a collaboration hub across the organisation

Strategic

Planning

Sales and

Marketing

Operational

Planning

Opportunities,

Promotions

Constrained

Qty Plan Short Term

Plans

Constrained Revenue

Margin Projections

Strategic

Plans

Sales

Forecast Financial

Planning

Scenario Plans

Constrained Rev &

Margin Projections

Strategic

Tactical/Execution

AOP, Finance

Plan

S&OP on HANA

Sourcing R&D

Portfolio

Spend &

Capacities Profit Mix &

NPDI


Benefits of Advancing on the S&OP Maturity Curve

Inventory write-off

as % of revenue

Metric Improvement

% of Revenue Loss due

to stockouts

Note: KPI performance improves with increasing best practice adoption from Low to High

Source: SAP Benchmarking 2012

On Time Delivery (as %)

Forecast Accuracy (as %)

Order Fulfillment

Lead Time (in days)

Aberdeen 2011

Experienced 81.9%

forecast accuracy level

for three months out into

the future

97.2% of orders delivered

to customers complete

and on time

Decreased cash-to-cash

cycle time by -.3% year

over year

Best-in-Class Companies:

0.29 0.25

-14%

1.0 0.8

-19%

86.3 90.9

+5%

76.8 83.3

+8%

6.24 4.06

-35%


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 & detailed

levels

SAP’s Approach to S&OP/IBP

Executive Review & Real-Time Analytics

Sales and Marketing

Forecasting

Consensus Demand Planning

Revenue & Profit

Impact

Inventory Target

Setting & Projections

Material & Capacity-

Constrained Planning

Supply

Finance Demand


S&OP Analytics, Simulation & Planning in Real-

time with a Unified Data Model

Capabilities: Plan in real-time, using

a unified model of your

demand, supply and

financial

Analyze complex data

instantly at any level of

granularity, aggregation,

and dimension

Import detailed data

directly from SAP and

non-SAP sources

Benefits:

Optimize product &

customer profitability

considering supply and

financial constraints

Adjust inventory levels

to reduce cost, while

meeting target service

Manage capacity

utilization to avoid

capacity and material

shortages


S&OP Process and Workflow Management with Role and

Context-aware Social Tools / Collaboration

See action items relevant

for your role

and current stage in the

process

Easily track progress

of the S&OP process

Enable Collaboration with all stakeholders


Ease of Use: Familiar, User-Friendly Interfaces

Set favorite views for quick access

Purpose-built S&OP toolbar

Save data and key assumptions

Post updates to the social feed

Enter data

directly

to the database

in Excel


Optimizing Inventory and Service Levels with SAP

Enterprise Inventory Optimization as part of S&OP process

Capabilities:

• Model inventory and service levels

across multiple echelons of the

supply chain

• Optimise across FG, Intermediate

and Raw Materials

• Optimise for detailed Channel /

Customer segmentation

Benefits:

• Deliver 10-30% inventory

reductions whilst increasing service

levels

• Orchestrate Inventory Investment

to support business priorities and

goals (Revenue, Profit & Growth)

http://www.honeywell.com/


Customer Feedback

“Today, our Sales & Operations Planning process is largely

manual, managed over disconnected spreadsheets, spans

multiple internal teams and contract manufacturers, and it

takes too much time and effort to respond to demand and

supply variations. We were able to assess the impact of

fluctuations in capacity positions at contract manufacturers on

our sales forecasts in real-time, model alternative scenarios

and cut our planning cycle time in half.”

James Smith

Director, McKesson

“S&OP powered by HANA makes demand and supply

balancing with large sums of data simple, fast, and

actionable. It integrates, aligns, and synchronizes Sales,

Operations, and Finance in real time, allowing collaborative

decisions with the help of analytics and simulations

on a demand-driven supply chain.

S&OP with HANA can do in hours what takes the business

weeks to do.”

John Flebut

Vice President, Atmel Corporation

“Cascades is aiming to cut inventory costs, as well as

generate tens of millions of dollars in additional savings.

S&OP as a process looks very promising as a means to

help achieve these objectives. We were impressed with the

level of engagement from the SAP team. S&OP on HANA,

with its robust simulation capabilities, is a solution that looks

like it has great potential to accelerate our achievement of

these objectives.”

Dominic Dore

CIO, Cascades

“S&OP on HANA combines the real-time simulation and analysis

capabilities of HANA with contextual social collaboration capabilities to

provide a truly unique solution in the marketplace. It offers the

opportunity to significantly increase the speed of decision making

throughout the process and streamline collaboration across distributed

teams. What can take days of preparation, with meetings and

information exchange, now has the possibility to be done all in one tool

and in real-time enabling seamless synchronization across the

business functions.”

Chris Walker

Director, Global S&OP Unilever





Demand


Manufacturing &


CONTROL

ORCHESTRATE

EXECUTE


End-to-End Demand Management

Demand Signal

Management

(SAP HANA)

Sentiments,

Web Data

Detailed Demand

Signals: POS,

Consumption,

Orders

Market Research

Syndicated Data

Demand

Signal

Capture

Analysis, Mkt

Research,

Social Insight

Demand

Sensing

Competition,

Pricing

Planning,

Replenishment,

VMI, Execution

Supply Chain Planning Strategy: Most Innovative Demand Management Methodology

Demand

Response

SCM


Challenges in todays environment Business Pain Points from lack of Demand Signal Visibility and Response

■ Promotion Profitability

■ Average ROI from Trade Promotions is negative ranging from -12% to -19% (2)

■ Avg. 8-20% out of stock rate depending on category (3)

■ Lost Sales

■ Loss of sales because of OOS for the top 100 retailers is estimated at $69 billion (3)

■ The average retailer in Americas loses the equivalent of $3.19 for every customer that walks

through the doors due to Out-of-Stock, resulting in either lost sales of specific items or a substitute

product in that category (4)

■ New Product Launch Failures

■ Median time to market for a new product in consumer packaged goods: 27.5 months (5)

■ 75% of new product launches fail (5)

Consumer Goods and High Tech companies face an enormous spend in Sales & Marketing

which averages 15 - 20 percent of sales and can fast approach a $200 billion (1)

#1 priority among consumer products companies: Increase the return on trade investments (2)

Source: Accenture (1), Capgemini (2), GS1 (3), IHL/RIS (4), AMR (5)


SAP Demand Management Information Latency and Lack of Granularity

New Approach

Direct access to

Consumer Demand

Wholesale

Level

Retail

Level

Consumer

Level

Distribution Network

Finished Goods

Manufacturer

Existing Approach

Multiple Layers to

Consumer Demand

Multiple layers

leads to latency

in data

Multiple

aggregations

leads to loss of

granularity

SAP Demand

Signal

Management, powered by

SAP HANA


Example: On Shelf Availability Analysis

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 26 26

Customer

• Beiersdorf AG (BDF), 18.000 Employee, 5.6 b€

Revenue

Business Objectives

• SAP DSiM as high performance solution for third-

party data integration and harmonization

• High degree of process automisation & improvement

of data quality

• Combines the BDF internal Business-Intelligence

with external data for Market- and Competitor-

Intelligence

Status

• First 17 Market Research Databases connected

• First productive use on time (End of May)

• Project Status: On Schedule, Green status

1st SAP Demand Signal Management in CP Industry

http://de.wikipedia.org/w/index.php?title=Datei:Beiersdorf.svg&filetimestamp=20090610180755


Managing Variability with Predictive Analytics : Improving

Forecasting and Respnse with Enterprise Demand Sensing

Adjustments

Disaggregation

Forecast patterns

Shipment patterns

Open order patterns

Optimal blend by lag patterns

Open order

correction

Predicted future

bias correction

• Daily outputs for execution

systems

• Detailed short term forecast for

‘mid cycle’ response management

• Pattern Prediction

• Back-feed for improved Supply

and Inventory Planning

Output

Algorithm determines

optimal weighting with

pattern recognition of

each input to determine

sensed demand


Typical use cases for SmartOps Enterprise Demand

Sensing As a planner, I want…





Demand


Manufacturing &


CONTROL

ORCHESTRATE

EXECUTE


• Decision support based on near

real time planning and execution

information (e.g. forecast

accuracy, stock coverage,

supply projection)

Highly attractive UIs for

operational reporting on APO

data

Supporting key Metrics and

KPI’s for Demand planning,

Supply Planning and Production

Scheduling

Real time analytics on APO

planning data

Decision Support innovations for Supply Chain Orchestration: Supply

Chain Info Center powered by HANA


Gain insight into landed cost components,

optimize margins and reduce non-

profitable customers and channels

• Implement a rationalized and flexible

sourcing strategy based on minimized

total landed cost and not just purchasing

price

• Negotiate better terms through visibility

into carrier and supplier price and

performance

• Benefit from a flexible and extensible data

model that support non-SAP and SAP

source systems

• Quick deployment with SAP rapid

deployment offering

• Intuitive user experience based on

Business Objects Enterprise platform

NEED SCREEN SHOT

Decision Support innovations for Supply Chain Orchestration : Landed

Cost Analysis

Solution to analyse and automate

the capture of all landed cost data


SAP Customers managing Complex Global Networks with SAP

Collaboration Solutions


Enabling the Best Business Network

SAP Information Interchange

Content Engine

Item

Locati

on

Party

Business

Partner

Profiles

SAP Supply Network

Collaboration

SAP ARIBA

Business

Network

Connect Once

On Cloud

On premise

Mobile


Effective Short-Term Planning Throughout the Supply

Network – Colgate Story for Customer Collaboration


SNC: Work Order Collaboration at Lockheed

Martin OneAero

Contract Manufacturer:

• Receive Work Order

• Negotiate Dates

• Send Interim WIP Updates

Create PO and issue

Work Order to Contract

Manufacturer

Ability for Procurement

to select which items to

track via SNC Work Order

Milestone tracking at PO

Line Item of Supplier WIP

Ability to interface Work

Order information to

other SAP Objects

Delivery Date updates

can be passed back to

Customer systemically

Visibility to Progress at Supplier Locations Provides Insight to Changes that

Affect the Final Delivery Date and Quantity

Contract

Manufacturer

Lockheed Martin

Contract

Manufacturer





Demand


Manufacturing &


CONTROL

ORCHESTRATE

EXECUTE

Markus Rosemann, Vice President Logistics & Order Fulfillment

SAP AG, September 11th, 2013

World Class Logistics with

SAP Supply Chain Execution

Customer


Why Logistics & Order Fulfillment?

SUPPLY CHAIN EXECUTION

Massive Market Spend

= SOLID OPPORTUNITY

10 % of GDP ca. 5 %

+100 % YOY Strategic Play

Solid Logistics Savings

Major SAP Investment Strong SAP Growth


Supply Chain Execution… …A complex process and challenging environment

Shipper Consignee

Planning, orchestration, and

execution

of the physical movement of

goods

Logistics Costs

Customer Service

Efficiency

Visibility Asset Utilization Revenue Goals

Traceability Global Sourcing

Multi-Mode Shipping

Global Trade Compliance

Sustainability Competition

Productivity

Returns Management


Warehousing & Transportation are Evolving

• Holistic transportation management

• Integrated order management

• Domestic, international, in/outbound

shipment

• Multi-mode, multi-stage freight mgmt.

• Global rate & charge management

• High performance warehouse

execution

• Built-in optimization & automation

• Industry-specific process support

• World-class analytics

• Deep SAP Business Suite integration

Transportation Management Warehouse Management


Yet in Business the Silos often Remain

Order Mgmt. &

Freight Planning

Capacity &

Demand Planning

Freight Execution

& Monitoring

Freight

Settlement

TRANSPORTATION MANAGEMENT

WAREHOUSE MANAGEMENT

Storage &

Operations

Inbound

Processing

Outbound

Processing

Actual load / goods issue ?

Accurate shipment visibility & invoicing !

? Warehouse loading point capacity

Optimal delivery / pick-up planning !

Planned delivery / pick-up times ?

Efficient dock appointment scheduling !

? Transp. plan / delivery consolidation

Optimal Wave & Load Planning !


Order Mgmt. &

Freight Planning

Capacity &

Demand Planning

Freight Execution

& Monitoring

Freight

Settlement

Warehouse

Execution

The Market is Looking to a New Paradigm

Integrated planning, orchestration, execution, & tracking

of the physical movement of goods

Integrated Supply Chain Execution

Tracking

… …


SAP Supply Chain Execution

Shipper Consignee

Freight Forwarder

Carriers

WAREHOUSE MGMT

TRANSPORTATION MGMT

TRACK & TRACE


SAP Supply Chain Execution Mission and Strategy

The World's Best Supply Chain Execution

Platform Mission

Freight Forwarder

Carriers

Shipper Consignee

Integrated Connected Best-in-class Verticalized

Communication &

Collaboration

Capacity Procurement & Network Planning

Order Management

Warehouse Execution

Freight Execution & Monitoring

Customer Billing & Freight Settlement


Analyst Validation

SAP is the leader in 13 categories

of TMS market*

SAP is #1 in the overall TMS market

SAP is #1 in the TMS software category

SAP is #1 in the Fleet Management sector

SAP is #1 TMS vendor in EMEA

SAP is #1 TMS vendor in Asia Pacific

SAP is #1 TMS vendor to Tier 1 Customers

*based on 2012 revenues

“Transportation Management Systems Global Market Research

Study 2013” report by ARC, August 2013

SAP is #1 in the WMS

software market segment

SAP is #3 in market share in the overall

WMS market

SAP is #1 in overall market share in Latin

America and #2 in Asia

SAP is #1 WMS vendor to the Automotive

industry

SAP is #1 WMS vendor to the Machinery

Manufacturing industry1

SAP is either #2 or #3 in many other

industries based on 2012 revenues

“Warehouse Management Systems: Global Market Research

Study:” report by ARC, August 2013


Transportation Management


SAP Transportation Management Overview

Tracking & Reporting

Order Mgmt. &

Freight Planning

Capacity &

Demand Planning

Freight Execution

& Monitoring

Freight

Settlement

TRANSPORTATION MANAGEMENT

Holistic Transportation Mgmt.

• Shipper & freight forwarder industries

• Large & midmarket enterprises

• Simple & complex, high volume operations

• Multi-mode, domestic & international transportation

• Inbound & outbound freight management


Strong SAP TM Momentum and Success

Over 100 customers

Across all regions

In all transportation-relevant industries

Over 50 implementation projects

Productive use of SAP TM in multiple industries

and sites around the globe

Consumer Products, Chemicals, Automotive, High Tech, Wholesale

Distribution, Logistics Service Providers, Utilities, Defence,,…

Strong and growing SAP and Partner Service Portfolio

http://www.panalpina.com/www/global/en/home.html


Warehouse Management


SAP Extended Warehouse Management

EXTENDED WAREHOUSE MANAGEMENT

Inbound Processing Outbound Processing Storage & Operations

Tracking & Reporting

Best-in-class Warehouse Mgmt.

All industries

Distribution centers & production warehouses

Simple & complex, high volume operations

Built-in optimization & automation

Industry-specific process support


Overview SAP EWM Customer & Market Status Strong customer growth and implementation momentum

Facts and figures

Over 200 active customers added in 2012

More than 500 distinct live/active customers

Productive use of SAP EWM in more than

20 countries and 24 industries

Sample customers

Live customers and live sites Customer geographical coverage

Coca-Cola

Enterprises

0

100

200

300

400

500

600

12-31-07 12-31-08 12-31-09 12-31-10 12-31-11 12-31-12

Live Sites

LiveCustomers

http://www.wuerth.de/web/de/awkg/index.php

http://www.daimler.com/dccom/home/de

http://www.dsg.dk/da/Pages/Forside.aspx


SAP is Building the Platform for the SCE Network

Strategic & Major SAP Investment

Strong SAP-Customer Innovation

Solid, growing market momentum

Freight Forwarder

Carriers

Vendor Consignee

Import / Export Customs

http://www.dsg.dk/da/Pages/Forside.aspx

http://images.picturesdepot.com/photo/d/dr_pepper-22281.png

http://www.panalpina.com/www/global/en/home.html


Track & Trace


Track & Trace From Raw Material to Point of Consumption

Product Genealogy Item Serialization&Product Traceability

Procurement Visibility Fulfillment Visibility

Goods and Assets in-transit


SAP Global Batch Traceability Efficient Corporate Batch Genealogy Search & Exploration

• Corporate-level view on cross-system product genealogy and the distribution of

the involved goods

• Rapid investigation and -when required- reporting to guide precision

withdrawal/recall

SAP

GBT

„One Click“ reporting


Supply Chain Convergence and Outlook


SAP Supply Chain Execution A Solution View

Increased visibility

through

Track & Trace

Compliance with

directives

Improved

operational

efficiency

Reduced safety

stocks

Comprehensive

Transportation

Management

Multi-mode

Domestic,

international,

inbound & outbound

transportation

Shipper, freight

forwarder and carrier

processes

Best-in-class

Warehouse

Management

All industries

Distribution centers &

production

warehouses

Simple & complex,

high volume

warehouse operations

Supply Chain Execution Platform

Solution for Shippers and Freight Forwarders/Carriers


Business challenges There is a solution

The SAP Landed Cost Analysis rapid-deployment

solution helps you extract cost data across

multiple source systems to get a holistic view of

landed costs for products.

Identify cost trends, discover hidden costs, and

optimize sourcing decisions to drive down product

costs and improve overall margin.

Total Landed Cost Analysis

Lack of insight into the actual, often hidden costs

Inability to accurately assess the best vendors to

source the product

Lack of visibility to the risks and costs associated

with sourcing from different locations

Impact of changes in global parameters, such as

fuel prices on product costs

Inability to monitor cost performance and results

over time

Manual processes for analyzing, reporting, and

updating landed cost data

Inability to aggregate data from multiple data

sources

Lack of confidence in the completeness and

accuracy of data and analysis


Business benefits

SAP Landed Cost Analysis rapid-deployment solution

Business benefits

Get a comprehensive picture and detailed

insights into landed cost analysis

Reduce landed costs and improve

competitiveness

Increase agility to meet customer

demand

Reduce supply chain risk while increasing

overall margins

Help ensure data accuracy and

consistency

Eliminate manual processes and reduce

maintenance costs


SAP Supply Chain Execution Innovation Roadmap

Shippers

Rail & Truck

Carriers

Freight Forwarders

2011 2012 2013 2014 …

Warehousing, Transportation & Event Management

TCO / TCI

HANA, Mobile

Integration, Connectivity

Analytics

Retail

Other Carriers

Contract Logistics


Strategy for Supporting Areas

SAP HANA

SAP HANA-powered

SCE analytics

SAP HANA-powered

SCE solutions

Mobile

Ecosystem

enablement

Standard SAP

mobile solutions

Integration/Connectivity

End-to-end process integration

Out-of-the-box connectivity

TCI / TCO

Supply Chain

Execution Platform

Rapid Deployment

Solutions

SA

P H

AN

A

SAP in-memory

computing Track & Trace

SAP Transportation

Management

SAP Extended

Warehouse Mgmt.

SAP Supply Chain Execution Platform


Supply Chain Value Map

Sales & Operations

Business Planning

Demand Driven

Supply Chain

Logistics & Order

Fulfillment

Service Supply

Chain

Supply Chain

Monitoring

Sales & Operations

Planning

Inventory & Service Level

Optimization

Demand Management

Collaborative Response

Management

Manufacturing & Supply

Planning

Transportation

Management

Warehouse

Management

Track & Trace

Service Parts Management

Supply Chain GPS

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Thank you

Contact information:

Markus Rosemann

Vice President, Logistics & Order Fulfillment,

Industry Business Solutions Supply Chain

SAP AG, Walldorf

[email protected]

mailto:[email protected]

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