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Transform Supply Chain with SAP S/4HANA

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White Paper Background and Key DefinitionsThe information outlined below is helpful to understand the contents of this value proposition white paper. It gives clear details on the objective and scope of the paper. Key definitions are also provided for select sections of the paper to provide further clarification.

DELIVERABLE OBJECTIVE

Provides information on the value in moving from an ERP on a traditional database to SAP S/4HANA and cloud and line-of-business (LoB) solutions

KEY DEFINITIONS

Within the process and sub-process deep-dives, there is detailed content in table format articulating the following:

Pain points Represents major customer business and IT challenges

Current state with ERP on traditional database Represents the ERP capabilities that are available on a traditional database

SAP S/4HANA capabilities Represents the capabilities shipped with the latest release of SAP S/4HANA

Cloud/LoB + SAP S/4HANA capabilities Represents all other solutions that can be integrated with SAP S/4HANA and provides business value. For example, SAP S/4HANA + the SAP Integrated Business Planning solution, or SAP S/4HANA + the SAP Manufacturing Integration and Intelligence (SAP MII) application, etc. These solutions are not embedded in SAP S/4HANA, but integration scenarios exist for these

Planned innovations and future direction* Represents new functionalities planned for future release of SAP S/4HANA, or new integration possibilities planned for SAP S/4HANA

With the value proposition section, all quantified benefits are conservative estimated improvement ranges tied to the top value drivers. They are based on early adopters or new developments/enhancements of SAP S/4HANA + LoB and cloud enhancements that can drive value. Keep in mind that these should be used as a guide. We recommend working together to assess your current maturity and the value of moving to SAP S/4HANA in order to develop a personalized business case.

Detailed road map available on SAP.com (Customer Login Required)

This document and SAPs 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, included but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement.

http://www.sap.com/roadmaps

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Agenda

SAP S/4HANA Supply Chain Capability and Value Proposition Overview 4

Demand-Driven Business Planning Deep-Dive 7

Response and Supply Orchestration Deep-Dive 9

Logistics and Order Fulfillment Deep-Dive 11

Value Proposition 13

Customer References 14

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SAP S/4HANA Supply Chain Overview

TRANSFORM SUPPLY CHAIN ON SAP S/4HANA

In todays dynamic digital marketplace, companies need comprehensive access to accurate, real-time information about their enterprise and about their customers, suppliers, and competitors.

With the right information, businesses can be agile enough to produce and distribute personalized products with shorter lead times and smaller runs even down to a lot size of one and ensure that they can meet customer demand while keeping costs under control and productivity at its highest. Achieving excellence in this environment requires two important capabilities: visibility into operational, customer, and market data, and speed across the extended supply chain to react to changes in demand and supply and gain competitive advantage.

With SAP S/4HANA as the digital core, customers can build a foundation for extended supply chain visibility and speed. Since the release of the SAP S/4HANA Enterprise Management solution in November 2015, the wave of digital business-enabling innovation in our next-generation business suite has spread throughout the enterprise, across finance, manufacturing, procurement, and the supply chain. SAP S/4HANA Supply Chain and SAP S/4HANA Manufacturing allow companies to gain visibility into real-time market conditions and production efforts, and then react to that information with the speed required to deliver products that customers want with the efficiency they need.

Innovative technology in SAP S/4HANA yields enhanced visibility across the entire supply chain.

Multiple levels of data structures and aggregations are removed, allowing material data, status of production, procurement, and inventory to be available in real time, reducing latency and inaccuracies in understanding supply and demand and enabling the most recent demand signals to be factored into planning decisions. With material requirements planning (MRP) specifically designed to take advantage of SAP HANA, planning can be run more frequently, reducing inventories and increasing responsiveness. Users can also access critical operational analytics and decision support information in real time. Embedded analytics a core concept of SAP S/4HANA means that business users can conduct real-time evaluations of analytical views of the same data that is present in the execution system. Users no longer have to wait for analytical data to be available, and their analyses are no longer based on outdated data.

Visibility provides insight when supply and demand are out of balance. But this visibility is valuable only if one can act fast enough to respond to the information presented. Once a supply and demand issue has been detected, the organization must rapidly evaluate alternative scenarios for responding, select the best one, and execute. With SAP S/4HANA Supply Chain, any supply or demand change, such as a promotion that generates higher-than-forecasted demand or disruption in supply due to a late delivery, can be quickly propagated up and down the supply chain to detect imbalances as well as simulate alternate scenarios.

For example, in order promising, the processing of large, multi-line orders can be dramatically accelerated. Companies that receive large order batches overnight via electronic data interchange (EDI) often have challenges in processing these volumes quickly. This is particularly challenging when a growing number of customers is requesting same-day shipment. In SAP S/4HANA Supply Chain, multi-line orders are processed efficiently, dramatically shortening this latency.

SAP S/4HANA can be integrated with SAP Integrated Business Planning, enabling advanced planning and response across strategic, tactical, and operational time horizons. SAP Integrated Business Planning for sales and operations allows companies to align market demand and opportunity with collaboration across all lines of business, including financial and supply chain simulations, to ensure profitable business growth. SAP Integrated Business Planning for inventory and SAP Integrated Business Planning for demand enable companies to sense short-term demand pattern changes and optimize working capital to ensure inventory supports a competitive service level. Short-term volatility is inevitable, and the SAP Supply Chain Control Tower solution and SAP Integrated Business Planning for response and supply will alert all stakeholders in the supply chain to any changes in demand or supply, and allow real-time response management and simulation to propose effective resolution to ensure priority demands are satisfied at the lowest cost.

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Response and Supply Orchestration

Logistics and Order Fulfillment

SUPPLY CHAIN MANAGEMENT (SCM) CAPABILITIES

Outlined below are the primary capabilities for SCM where value can be achieved through SAP S/4HANA + SAP cloud and LoB solutions.

Demand-Driven Business Planning

Sales and operations planning***

Inventory optimization***

Demand planning and demand sensing***

Inventory and basic warehouse management*

Extended warehouse management**

Transportation management**

Track and trace***

Supply chain control tower***

Response and supply management***

Material requirements planning (MRP)/constrained production scheduling*

Rescheduling and available- to-promise (ATP)/advanced available-to-promise*

SAP S/4HANA Supply Chain Overview

* Technically part of SAP S/4HANA, may or may not require an additional license** Planned to be part of SAP S/4HANA in the future, may or may not require an additional license*** Requires additional products integrating with SAP S/4HANA

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SAP S/4HANA SUPPLY CHAIN VALUE PROPOSITION SUMMARY

SAP S/4HANA enables companies to integrate, embed intelligence, and visualize all supply chain processes from supplier to customer. Digital supply chain and mission-critical business processes are supported across the enterprise with one single source of live information.

Faster business outcomes with reduced operational cost, thanks to simplified system landscapes. Reduced number of systems and interfaces because of redesigned data structure and embedded solutions in SAP S/4HANA

Live inventory management and accelerated MRP leading to reduced days in inventory

Advanced ATP checks and back-order processing, leading to improved order fulfillment capabilities

Personalized user experience (UX) with instant insight on any device, resulting in higher employee productivity with a focus on value-added tasks

Integration with sales and operations planning and demand management for effective supply chain planning

SAP S/4HANA Supply Chain Overview

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Typical Pain Points Current State with ERP on Traditional Database

SAP S/4HANA Enhanceme