Delivering Real-Time Business Value for Wholesale Distribution

Delivering Real-Time Business Value

for Wholesale Distribution SAP Business Suite powered by SAP HANA

July 2013 Public

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

New competitors are entering the wholesale

distribution market and driving existing distributors

to find new ways to serve their customers

Increase the number of sales channels offered to customers

Optimize the number of products, services, and geographies

Route customers carefully to the most profitable cost-to-

serve models

The real-time opportunity

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 3 Public

Becoming an innovation-driven enterprise Align business operations with customer needs

Unlock new

growth

opportunities

before your

competitors do

• Predict trends and evolving customer needs

• Enable complete insight into customer information

• Deliver superior customer service across different

channels

• Identify profit-drivers and profit-destroyers and initiate

action to increase profitability

Drive your

business at the

speed of the

market

• Enable insight -driven business decisions with

real-time insight

• Deliver fast simulation and impact analysis

• Utilize real-time, adaptive forecast and replenishment

processes

• Simplify your IT landscape

Empower people

to decide and act

in the business

moment

• Support agile decision making with real-time insight

• Deliver one version of the truth to enable true insight to

action


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Industry value map for wholesale distribution Fuel profitable growth for wholesale distributors

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and Project

Management

IT Service

Management

IT Strategy and

Governance

Profitability Optimization

Customer Stratification and

Cost to Serve

Spend Analysis

Cost Recovery and Rebates

Opportunity to Cash

Marketing Planning and

Resource Management

Contracts, Orders, and

Receivables

Web Channel

Customer Service and Support

Procure to Pay

Supplier Discovery and

Lifecycle Management

Procurement and Order

Collaboration

Collaborative Invoice to Pay

Supply Chain Planning

and Execution

Demand Management

Transportation Management

Warehouse Management

People and

Talent Core Human

Resources and Payroll Talent Management

Time and Attendance

Management

Finance and

Trading Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management General Trading

Enterprise Risk and

Compliance

Management

Supply Chain Analytics

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Development and

Integration


Industry value map for wholesale distribution Real-time value for key end-to-end processes

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and Project

Management

IT Service

Management

IT Strategy and

Governance

Profitability Optimization

Customer Stratification

and Cost to Serve

Spend Analysis

Cost Recovery and Rebates

Opportunity to Cash

Marketing Planning and

Resource Management

Contracts, Orders, and

Receivables

Web Channel

Customer Service and Support

Procure to Pay

Supplier Discovery and

Lifecycle Management

Procurement and Order

Collaboration

Collaborative Invoice to Pay

Supply Chain Planning

and Execution

Demand Management

Transportation Management

Warehouse Management

People and

Talent Core Human

Resources and Payroll Talent Management

Time and Attendance

Management

Finance and

Trading Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management General Trading

Enterprise Risk and

Compliance

Management

Supply Chain Analytics

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Development and

Integration

Highest value for

wholesale distribution

1

4

5

2

3


Today With SAP Business Suite on SAP HANA

KPI improvements are high-level estimates and must be validated for each customer situation

Contracts, orders, and receivables Business value for line of business (LoB) Sales

Missed market opportunities due to a

lack of visibility and inefficient

processes

Data explosion, driven by a new level

of connectivity for consumers through

mobile devices and social networks

Data in disparate data sources, which

prevents a true 360-degree view of

the customer

Agile marketing to respond faster to

changing market dynamics and

opportunities

New analytical, data-mining functions

for Big Data (social media and

predictive)

Near-real-time monitoring and

reporting on marketing performance

One central place for collecting all

customer data, leading to a 360-

degree view of customers in real

time

Precision marketing to personalize

every interaction with the customer

Improve profitability by

0.5%

Optimize

Increase

return on marketing

investments by

15%

customer

satisfaction by

40%




Customer stratification and cost to serve Business value for profitability and cost analysis

Data latencies and processes delays

affect the ability to react to issues

and opportunities

Lack of data depth and user self-

service affect internal decision-

making

Long-running processes

Time-intensive data queries

Mostly manual data analysis

Substantial amount of effort (time

spent) not directly adding to value

Suboptimal resource efficiency and

effectiveness

Timely execution of critical business

processes supports decision making

and increases the ability to act swiftly

(insight-to-action) in dynamic market

environments

Ability of critical transactions and

calculations to run quickly

Instant response times on queries

Prebuilt analytics to automate the

data-analysis process

Leaner processes from data capture

through data analysis

Increased productivity through

process-optimized analytics and

mobile support

Improve

Reduce

Minimize

service level

performance

cycle times and

manual effort

Operating costs




Financial performance management Business value for planning, budgeting, and forecasting

Planning performance limited to

OLAP; staged cubes for transactional

and master data

Data-load performance driven by the

amount of data extracted from SAP

Business Suite

Reporting, loading, and retraction

performance limits planning iterations

Drill-down within OLAP cube, and

drill-through to OLTP data and data in

SAP Business Suite within standard

times

Seamless replication of master and

transactional data from SAP

Business Suite

Availability of more granular data to

support planning

Negation of Big Data challenge; for

faster extract and activation times for

days sales outstanding (DSO)

Iterative planning and real-time

simulation supported through

improved performance

Improved performance for drill-down

(expand) and consolidation (collapse)

Fast drill-through and live view of

transactional data in SAP Business

Suite

Improve service level

performance

Reduce

Minimize

cycle times and

manual effort

Operating costs




Demand management Business value for material requirements planning

Decisions often based on periodic

material requirement planning (MRP)

runs and outdated information

Process done in batch

Inability to replan quickly if conditions

change due to long run times

Prediction of inventory coverage for

critical items is difficult

Inability to replan if conditions change

during the planning horizon due to

long run times

Faster replanning, allowing more

frequent MRP runs in shorter cycles

Instant reaction to demand changes

and updates to the supplier

Demand information is propagated

faster through the supply chain

More frequent MRP runs:

Reduced inventory and safety-stock

levels

Faster information flow toward

suppliers, enabling them to react

faster to changed planning conditions

Better synchronized material demand

and supply planning with reduced

bullwhip effect

Reduce out of stocks by

36%

Decrease

Limit

inventory and

safety stocks by

29%

bullwhip effect




Demand management Business value for demand-driven supply chain

Access to and effective use of timely

demand information from the supply

network becoming more and more

difficult

Decisions often based on incomplete,

inaccurate, and often outdated

information

Challenge of administering today’s

hardware and system landscapes

Increased business and expert user

productivity with faster planning

processes and improved user

experience and by driving rapid

consensus across the supply chain

network

Near-real-time reporting with

increased speed of information

analysis, leading to better supply

chain visibility and decision

making

Improved production and cost

efficiency by simplified system setup

and administration and by providing a

more robust planning foundation

Reduce planning cycle

times

36%

Increase

Reduce

Supply chain

performance

18%

total cost of

ownership (TCO)

24%




Supply chain analytics Business value for supply chain monitoring

Lack of near-real-time information

Batch jobs to extract data from

planning system to central reporting –

typically on a weekly basis

No ad hoc operational reporting

Need for creation of reporting, queries,

and dashboards by individual

customers

Inability to run subdaily planning jobs and analyze the results because of the long data-preparation times in SAP NetWeaver BW

Lack of fast responses to ad hoc queries from customer might result in lost sales.

Decision support based on near-real-

time information

Ability to update information through

delta capabilities

Standard analytical reporting

scenarios provided with streamlined

data load

Planned ability for customers to add

their own key performance indicators

(KPI) and dashboards

Use of advanced data-retrieval and

computing capabilities of SAP HANA

Platform optimize reporting on

supply-chain planning data

Reduce time spent compiling,

generating, and

waiting for reports

Increase

Optimize

visibility into key

supply chain data in

an easily consumable

manner

analysis capabilities

with multiple levels of

aggregation and drill-

down techniques


Next step Business-scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover customer-specific areas for business

improvement and quantify value potential

We suggest such a workshop with your

LoB and IT experts

We recommend a performance and usage analysis

of your current system as a starting point

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

Thank you

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

Appendix Detailed customer cases


Reference wholesale distribution customer Summary of validated scenarios (combined findings)

Feasibility

Bu

sin

ess v

alu

e

Legend

Me

diu

m

Hig

h

Medium High

Corporate

performance mgmt.

commodities

forecast

SAP Business

Suite on SAP

HANA

SAP HANA:

Applications

SAP HANA

Platform

Profitability and

pricing analysis

(US$23 million

annual value)

Supply chain

optimization

analytics

($19 million once)

Real-time analytics

(call center)

Real-time supply

chain (machine to

machine (M2M))

National dashboard

(enterprise

performance

management (EPM)

and mobility)

1 Short Term

FIN: Profitability Pricing Analysis Increase buy-side profit through detailed analysis and supplier evaluation. Improve supplier negotiation to increase margins.

SCM: Supply Chain Optimization Analytics Enable fact-based decisions on a single holistic platform to optimize the supply chain and support initiatives to reduce working capital

EPM: National Dashboard About 25,000–30,000 orders per day and large data volumes. National dashboard consolidation of data from several systems, delivered today in a static format. Mobility and a highly interactive real-time version are needed for executive management.

2 Medium Term

EPM: Corporate Performance Management Improved market forecast for commodities to assess risk exposure

CRM: Real-Time Analytics Loyalty management; voice and text mining

SCM: Real-Time Supply Chain through M2M connectivity

Optimize logistics

SAP HANA Platform: customer-specific

SAP HANA products: SAP NetWeaver BW on SAP HANA,

high-performance applications (HPAs), apps powered by

SAP HANA

SAP Business Suite on SAP HANA

SAP HANA

use case

Phase – deployment road map SAP HANA use cases mapped to

industry value map end-to-end solutions


Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

sessions and may be incompletely validated

A leading distributor of fine wines and spirits – Real-time offer

management Wholesale distribution

Business Context and Goals

Enable a sales rep to add value to client through sales insights based on heat maps and social

networks and help activate sales

Enable a sales rep to become a value-added resource to the retailer owner and improve the

quality of client interactions

Business Challenges

Mobility is required as a key component because analysis must be put in the field to get value

Customer is mobilizing this solution in the Florida market through a proof of concept

Process Innovations

Analyze past sales and suggest bundles based on like customer profiles and consumption

patterns

Mobilize insights on an iPad to make the sales person to be more effective with the customer

Contribution of SAP HANA

Real-time offer and suggestions: Suggest buying quantities based on consumption patterns

(frequently ordered items)

Ability to up-sell orders based on discount levels and promotions

Value Drivers and KPIs

Improve the number of sales transactions where cross-sell and up-sell is offered

Innovation scope

SAP HANA Platform (customer-specific)

End-to-end (E2E) solution

Consumer products – enterprise marketing

optimization

Value potential 5

Feasibility 5

Low High

1 5

Low High

1 5




A leading distributor of fine wines and spirits – Warehouse

benchmarking report Wholesale distribution


Enable warehouse employees to see how the warehouse is performing in real time

Enable employees to work toward targets in real time and reassign resources as needed

throughout the warehouse

Business Challenges

Warehouse operations are evaluated on 87 KPIs that would take 3 days to produce a

benchmark report

Process Innovations

Warehouse workers monitor themselves and reassign themselves as needed throughout the shift


The report now runs in less than 10 seconds, allowing it to be displayed in the warehouse on

large dashboard monitors


Improve warehouse efficiency

Improve employee satisfaction

Innovation scope

SAP HANA Platform (customer-specific)


Wholesale distribution – warehouse

management

Value potential 4

Feasibility 5

Low High

1 5

Low High

1 5




Wholesale distributor – Strategic customer stratification Wholesale distribution


Enable sales staff to improve gross margin by stratifying customers by margin contribution and

other key factors

Business Challenges

Sales and support staff were unaware of which customers contributed to margin and which

drained service resources

Process Innovations

Sales and service staff can now tailor their level of service based on the contribution of the

customer to overall margin and drive low-margin customers toward low cost-to-serve

engagement models


SAP HANA provides the processing speed required to give real-time data access


Improve gross margin

Improve earnings

Innovation scope

SAP HANA Platform (customer specific)


Wholesale distribution – customer stratification

and cost to serve

Value potential 5

Feasibility 4

Low High

1 5

Low High

1 5




Wholesale distributor – Profitability and pricing analysis Wholesale distribution


Profitability and pricing analytics: Increase buy-side profit through detailed analysis and supplier

evaluation. Improve supplier negotiation to increase margins

Business Challenges

The company needs to perform more granular profitability analysis at both the customer and

product levels

It lacks margin insight at the customer and product levels and cannot segment customers or offer

better service levels

Process Innovations

Enforce business-process standards and improve visibility into the overall planning process at

the company with a unified data platform

Perform profitability analysis at the most detailed customer and product levels, including both

branded and generic data

Improve customer segmentation with detailed analysis of customer and product data


Gain insight into margins at customer and product levels to negotiate contracts with suppliers

Simulate margin erosion on price negotiations before signing a supplier contract


Improve gross margin

Innovation scope

SAP Business Suite on SAP HANA (now and

in the future)


Wholesale distribution – customer stratification

and cost to serve

Value potential 5

Feasibility 4

Low High

1 5

Low High

1 5




Wholesale distributor – Supply-chain optimization analytics Wholesale distribution


Supply-chain optimization analytics: Enable fact-based decisions on a single holistic platform to

optimize the supply chain and support initiatives to reduce working capital

Business Challenges

• Missed opportunities to optimize the supply chain based on better and more timely analysis of

company data:

• Inability to identify impact on margin from decisions based on a hunch

• Inability to analyze at the most-detailed level across all SKUs, customers, time series,

and distribution centers

• Lack of a systematic approach, causing lengthy manual processes and data-integrity

issues

Process Innovations

Identify opportunities more systematically by analyzing complete and detailed supply-chain data

holistically; analyze all aspects such as inventory levels, manufacturer information, customers,

and financial data


SAP HANA can be the one and only data repository for all supply chain data (SAP and non-SAP)

directly from source systems


Working capital reduction

Innovation scope

SAP Business Suite on SAP HANA (now and

in the future)


Wholesale distribution – supply chain analytics

Value potential 4

Feasibility 4

Low High

1 5

Low High

1 5


Breaking the limits at Würth

We have a slogan at Würth: Break your limits. That means that we always want to get

better and better every day. The key value for the business is speeding up key

processes such as MRP, order entry, and invoice management.

Harald Holl, Responsible for IT infrastructure and data centers, Würth Group

AT A GLANCE

Objective

Proof of concept

Solution

SAP ERP powered by SAP HANA

Benefits

Accelerate key processes (material requirements planning

(MRP), order entry, and invoicing) and reduce the total cost

of ownership

Watch the video here

http://www.wuerth.com/web/en/wuerthcom/index.php

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