Leveraging Network Collaboration for Accurate Clear-to-Build decisions

Patni Computer Systems Sapphire , Orlando May 17, 2010

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Introduction and Key Business Drivers for CTB

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Economic volatility is highlighting new challenges to my Business

Top CEO Issues Can I align the Production of my Finished Goods to fluctuating Market Demand ? On which dates in the future could there be a disruption to our customer fulfillment ? Can I simulate varying Finished Goods Demand to check my responsiveness ? Can I have a dashboard that continuously monitors levels of future Finished Goods fulfillments ?

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Need to ramp up / down to match changing market demand

Extending supply chains aimed at reducing costs and to penetrate new markets has resulted in complex Supply Networks and reduced agility to match demand swings

Extended Supply Chains

Fluctuating Demand

Implications Longer lead times Coordinate across continents Supplier networks may not be able to ramp up instantaneously to changing Demand Pin point exact root cause for fulfillment issues not easy

Implications Difficult to see to what extent Customer Demand can be fulfilled No easy tool to simulate supply plans in an outsourced manufacturing scenario Not sure of which critical component need urgent attention

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S&OP Capabilities - High-Tech Industry Concerns

Significant gaps in determining trade-offs in Supply chain and Implications of a constrained supply plan

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Performance Metrics Sample High Tech Company

Performance Results Key Metrics
Peer Group P1 Peer Group P2

Potential Benefits: Value of Closing the Gap to Peer Group P1

Gap to Q1 Gap to Average

Type

Metric

Company

(n= 20)
Avg. Q1 96.1 98.3 60.0 78.6 1.1 1.6 3.6 56.7 16.7

(n= 87)
Avg. 88.2 68.5 48.9 48.0 8.6 15.5 13.4 6.3 8.3 Q1 93.4

% Customer Fulfillment Rate

Direct Direct

88.0 70.0 25.0 80.0 5.0 10.0 10.0 15.0 5.0

90.8 76.2 32.4 42.6 4.9 12.9 9.9 14.5 6.0

Effectiveness: CFR Revenue Impact (% increase)

92.9 77.9 82.8 1.5 2.9 2.8 25.4 33.7

Effectiveness Effectiveness

% of Spend Managed Strategically

Indirect Services Direct

8.1

2.8
Efficiency: FTE Saving per billion of total spend (in millions)

% of Maverick Spend

Indirect Services Direct

% Spend Sourced via eAuctions

Indirect

Efficiency Efficiency

Services

50.0

6.9

28.3

14.6

FTEs per Billion of Total Spend (Overall)

208.3

147.7

62.1

113.9

34.5

6.1

% of Time Spent on Transactional Activities

40.0

52.6

34.1

54.7

30.3

Ranking:

Below Average

Between Average and First Quartile

First Quartile

Outlier

Note: Color commentary based on the Peer Group P1 benchmarks unless benchmarks are not available for Peer P1 * Indicates benchmarks not available due to inadequate number of data points for given KPI
Key Observations

Source -SAP Value Engineering

Company could do better demand supply match , material availability management . This would reduce out of stock situations and improve CFR On the efficiency front, automating key processes through supplier collaboration may help optimize the FTE allocation and reduce procurement function cost

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Solution Features

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Clear to Build Dashboard Know your Fulfillment Capability

Components Supplied to Manufacturers for Finished Goods Ramping up Demand seen in the next few months, Can I build to fulfill Demand ?
Brand owner

Need feedback on ability to scale up to Demand

Assembly sites in an outsourced location

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A dashboard on Customer demand fulfillment possibilities

Clear to Build Dashboard To what extent can I fulfill

Dashboard demand to versus provide visibility of

committed

supply

across entire supply network with

quick MRP simulation facility

Quick information on impact of demand variation on supply capability of CMs/ Suppliers Leverage SAP APO CTM engine for

Know your capability to fulfill demand in the future

material
Leverage location Detailed

constrained
SAP SNC

planning

and

availability check (MRP Simulation) for component stock availability at CM / Supplier visibility of constrained represented

components geographically

Available in xCelsius and WebDynpro formats

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Product Architecture

GUI

Clear to Build Solution ECC

Stock

BOM

Demand Receipts CTM Engine

SNC Supply Network Inventory

APO Advanced Planning and Optimization

Leverages SAPs Supplier Network Collaboration solution to view component inventory at CM location

Integration to SAP APO for running SNP simulations

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Understand Current Demand Supply Match

Enter Selections and select Go Double click location product to simulate demand change in next screen Review and Forecast and Can- Build data

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Simulate Quick MRP with revised Demand Data

1. Modify Demand

2. Confirm and simulate quick CTM results

Output

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Results review with xCelsius version - Graphical View

Shortage Location

Review BOM

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Competition Feature Analysis CTB Dashboard

Feature Comparison
Key Factors: Simulate Clear-to-build FG goods with gating component list
1 2 3 4 5 6 7 8 9 Quick MRP Seamless SAP integration Real time Demand Data Geographical Shortage representation Comprehensive usage of APO planning parameters Flexibility to support ERP upgrade Constrained based Planning Ease of Use Ease of Deployment

Patni Solution
Available Yes Available Available Available Available Available Easier to Operate Plug-n-Play

Competition
Available Not Available Not Available Not Available Not available Not Available Not Available Easier to Operate Complex Config. Multiple setups

Custom Dev.
Available Not Available Not Available Not Available

Not available Not Available

Available Easier to Operate Complex Config. Multiple setups

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14

Key Benefits of the CTB Solution

Capability
Manage ability to fulfill Demand
Simulate Demand Swings

Benefits
Measure ability to fulfill demand of different Finished Goods
Simulate the ability to fulfill Demand for Finished Goods in the future with different ramp up scenarios. View potential glitches in the SC Demand ramp up capability.

Minimize future SC glitches

Reduce lost opportunities and stock out penalties

Reduce possible penalties due to stock outs.

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Deployment Road Map

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4 Step Approach for Solution Deployment

Expert Virtual Roundtable : Initial conference with customer to

Step 1

understand Network visibility and available to promise needs, current landscape and challenges

Complementary Value Assessment Workshop: Consulting offer to

Step 2

assess a) Inventory process and Functions (b) Potential Immediate cost savings opportunities (c) Solution options (d) Cost benefit analysis

Proof of Concept : Configure Clear to Build Dashboard Solution in Patnis

Step 3

sand box system using customer data & scenarios. Review detailed deployment road map

& Signoff of

Value Based Implementation: Key features include fixed price Deployment

Step 4

Contract, SCM solution and Integrated Capable to Build

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