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Company Confidential 1

Supply Chain Collaboration Solving the

Supplier Integration ProblemPatni Computer Systems - Sapphire 2009

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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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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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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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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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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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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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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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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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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