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Company Confidential 0
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Company Confidential 1
Supply Chain Collaboration Solving the
Supplier Integration ProblemPatni Computer Systems - Sapphire 2009
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Company Confidential 2
Agenda
Economic Recession Impact on Supply Chain
SAP SNC Solution & Patni Add-on Capability
Patnis Inventory Risk Liability Solution for High Tech
Supplier On-boarding Methodology
Deployment Roadmap
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Company Confidential 4
First QuartileBetween Average and First QuartileWorse than Average
Typical Scenario in CPG Industry
Performance
Dimension
Metric Client1CP Ind. ( n=)
Avg Q1
Inventory
Analysis
Inventory Days of Supply TotalInventory
65 75 28
Inventory Carrying Costs (% ofRevenue)
1.3% 3.2% 0.6%
Inventory Obsolescence (%revenue)
0.6% 0.95% 0.15%
Safety Stock (% revenue) 60% 64% 30%
Transportation costs (% revenue) 5.86% 2.6% 0.01%
Internal Costs/Staffing Levels
Supply Chain Planning Cost (% ofRevenue)
0.90% 0.37% 0.03%
Supply Chain Planning FTE (per $Billion in Revenue)
61.4 51.3 5.6
$15.5
$0.0
Gap to Q1
Effectiveness: Reduce Inventory Carrying Cost ($M)
First QuartileBetween Average and 1st QuartileBelow Average
Effectiveness: Reduce Obsolescence (One-Time $M)
Potential Benefits: Value of Closing the Gap
$10.0
$0.0
$136.1
$0.0
Effectiveness: Increase free cash flow One-time ($M)
Key Observations Client has higher inventory carrying cost which could be due to high costs of capital, high inventory obsolescence, high DC
operating costs
Client significantly higher transportation costs which could be due to increased expediting of shipments.
Client has significantly high safety stock and days of supply as compared to Q1 peer group.
Gap to Avg
Source - SAP
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SNC Benefit Derivation
ProductivityImprovement
Value from SNC
Supplier
Collaboration
Streamlined SupplierCommunication
Reduction in BuyerManual Effort
Inventory
Reduction
Benefits 20% to 30% improvement
(annual benefit)
10% to 15% improvement(annual benefit)
7% to 10% improvement(one-time benefit)
15% to 20% improvement (one-time benefit)
Lead TimeImprovement
Lead Time VariabilityReduction
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Improve Visibility & Collaboration using SAPs SNC Solution
Simplified Navigation & Screens for users of outsourcedmanufacturing locations
Templates for uploads of Component Demand /
production schedules / planned receipts / on-hand
inventory data
Custom functionality for creation of Purchase Requests
from SNC / customized alert framework
What if Analysis using Xcelsius Dashboards
Information Broadcasting over different mediums
Leverage SAP SNC Capabilities with Patni Add-on Features
Patni Add on FeaturesSAP SNC Standard Modules
SK3
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Slide 8
SK3 May need to modify LHS graphic to avoid redlined items as currently all modules are relevant for SNC - am still not talking at this stageabout Risk Liability
Also need to check with Ramesh but we should be able to integrate reports and other functionality onto handhelds (will send u mail onthis from Ramesh)
Would this graphic work ?
Can u think of text block at bottom outlining benefits of using SNC with PAtni Add-on featuresSuraj Krishnan, 5/11/2009
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Company Confidential 8
This helps Vendor User to Search Work Order
based on only the required search criteria.
In most cases the Vendor Knows the PONumber that he is working with than the WO
Number
The related WO is pulled up and displayed in
the PO Information Area
This section allows the Vendor to modify the
Planned Production Schedule and also SplitProduction Runs.
This section displays the completedProduction Status. Similar to the ProductionProgress in Standard SNC
The Actual Production is reported here. This
creates a line for the corresponding Phase.The updated data is displayed in the
Production Status above.
Simplification Example all key functions on 1 screen for
users at the outsourced manufacturer location
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Company Confidential 9
This screen allows updating the QC Phase in a Work Order.
Since hundreds of records are created each day, there is a requirement to be able to update multiple Orders simultaneously.
On Save the program creates lines for the QC Phase for all the Orders selected based on the Lot status (Custom field).
Work Order Processing - Batch Update for QC Phase
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Company Confidential 10
SC Visibility & Risk Projections Business Challenges
Supplier
Distribution Centre
Customer
Component
Inventory
Finish ProductInventory
Demand
My Plant
ComponentInventory
Finish ProductInventory
WIP
Contract manufacturer
ComponentInventory
Suppliers Supplier
ComponentInventory
Suppliers Supplier
ComponentInventory
What if the demand reduce/cancel?
How can I reduce my
Inventory Liability?
How much Inventory am I holding?
Inventory held by supplier is not
reflected in my books
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Company Confidential 11
Patni Solution for High Tech - Inventory Risk Liability
Analytics using SAPs SNC
Traditional inventory metrics fall short to address these issues and guide supply chain
managers
Traditional inventory metrics are lagging indicators i.e. it takes weeks or months for
the problem to register in metrics
In todays environment, companies should measure and evaluate Inventory Risk
instead of just Inventory
Look at the whole supply chain and not just the portion within their own organization
Inventory Risk Liability AnalyticsInventory Risk Liability Analytics addresses this gap by developing N-tier inventory
metrics which helps in informed decision making in supply chain
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Company Confidential 12
Decision Making w/o Risk Liability Analytics
Laborious manual consolidation and data comparison
Check finish product Inventory, WIP and component
inventory owned by me.
Use Inventory Reports provided by ERP.
Check component inventory liability across supply
chain.
Contact Suppliers to get the inventory data at their
end.
Reconcile data from various suppliers
Check contract agreement with each supplier.
Calculate liability of component inventory at each
suppliers
Compare the actual inventory data with actual
requirements
Calculate liability of unused component inventory at
each suppliers
Supplier
Suppliers
Supplier
Suppliers
Supplier
Contract
manufacturer
Complexity andvolume of dataincreases withnumber ofcomponents andsuppliers
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Company Confidential 13
Decision Making with Risk Liability Analytics
Business Question - Demand for a product is reducing by 20%.
What will be my inventory liability for unused components?
Easy intuitive dashboard to pin point Inventory Risk across network
Simulate changing business situations and understand impact on
Inventory Risk
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Company Confidential 14
It is the amount of money at risk in the supply chain at any given point of time
due to unsold inventory
It depends upon
Price (Cost) of finished product
Cumulative Lead-time to build finished product
Average Demand for the finished product
RiskLiability KPIs Explained
Inventory Exposure - Definition
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Company Confidential 15
Inventory Exposure Solution Overview
Inventory
Exposure
Inventory Exposure
Percentage
Inventory
Exposure Turns
Trend values fromhistoric data
Check component exposure
details in next tab
Provides projection of inventory liability in dollar terms, percentage as of Cost of goods
sold and exposure turns. Indicates high vulnerability SKUs requiring attention
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Company Confidential 16
Component Inventory Exposure Solution Overview
Product
Details
Graphical
representation of KPI
Trend
Lead time
Cumulative
Lead time
Standard
Cost
Inventory Exposure
of component
On Hand
Inventory
Value of On
Hand Inventory
Provides projection of inventory exposure of applicable components
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Company Confidential 17
Supplier On-boarding Key Challenges
How do we integrate all our suppliers in a SNC solution?
A
B
CComes in all size & shape Supplier Geography
Supplier Language
Supplier Size
Supplier Time Zone
Supplier Technology/IT
Infrastructure
On boarding
/Integration Time and
Cost
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Company Confidential 18
2-3 days Web based training
to super users
Supplier User Manuals
Supplier On Boarding Process
Term Acclimatization Process Acclimatization Scenario Introduction
Database Congruence Process Congruence Personalization& UI Settings
Navigation Comfort Process checks
Sample WBTSample WBT
D:\sap\sapphire
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Thank You