Professional Documents
Culture Documents
Agenda
Economic Recession Impact on Supply Chain SAP Supply Network Collaboration (SAP SNC) application & Patni Addon Capability Patnis Inventory Risk Liability Solution for High Tech Supplier On-boarding Methodology Deployment Roadmap
Demand is reducing
Which location, Which supplier has the highest inventory?
Demand is cancelled
$15.5 $0.0
Effectiveness: Increase free cash flow One-time ($M)
$136.1
$0.0
Effectiveness: Reduce Obsolescence (One-Time $M)
0.37% 0.03%
$10.0 $0.0
61.4 51.3 5.6
Gap to Q1 Gap to Avg
Below Average Between Average and 1st Quartile First Quartile
Key Observations
Source - SAP
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.
First Quartile
Enable end-to-end and real time net work inventory visibility Real time collaboration with suppliers Reduced FTE for PO follow-ups Complete visibility and control on contract manufacturing purchasing Share forecast of FG seamlessly Let Supplier manage component inventory levels at your locations Reduce inventory burden and stock out risks
Demand Collaboration
Basic Services
Master Data Exception Management Data Validation
20% to 30% improvement (annual benefit) 10% to 15% improvement (annual benefit)
Simplification Example all key functions on 1 screen for users at the outsourced manufacturer location
This helps Vendor User to Search Work Order based on only the required search criteria. In most cases the Vendor Knows the PO Number that he is working with than the WO Number
This section allows the Vendor to modify the Planned Production Schedule and also Split Production Runs. This section displays the completed Production Status. Similar to the Production Progress in standard SAP 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.
8
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).
Component Inventory
Supplier
Component Inventory Component Inventory WIP
Suppliers Supplier
Demand
10
Patni Solution for High Tech - Inventory Risk Liability Analytics using SAP 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 Analytics addresses this gap by developing N-tier inventory metrics which helps in informed decision making in supply chain
11
Contract manufacturer
Supplier
Suppliers Supplier
Suppliers Supplier
13
14
Inventory Exposure
Provides projection of inventory liability in dollar terms, percentage as of Cost of goods sold and exposure turns. Indicates high vulnerability SKUs requiring attention
15
Lead time
Standard Cost
On Hand Inventory
Supplier Geography Supplier Language Supplier Size Supplier Time Zone Supplier Technology/IT Infrastructure On boarding /Integration Time and
Cost
Term Acclimatization
Process Acclimatization
Scenario Introduction
Sample WBT
Database Congruence
Process Congruence
2-3 days Web based training to super users Supplier User Manuals
Navigation Comfort Process checks
Demo
18
Visit us at Booth No. 949 to see demo of the Inventory Risk Liability Solution Currently part of Best-Run Now Industry Solutions for High Tech
19
Thank You
20
Hyperlinks
21
The amount of committed inventory within total supply chain based on expected demand and cumulative lead time associated with the current supply chain. In short it is the amount of money at risk in the supply chain at any given point of time.
Inventory Exposure = Price (Cost) * Cumulative Lead-Time * Average Demand This is calculated for each component of the product. The sum of the individual pieces then coalesces to show the exposure for a product, a product line, or a whole company.
For example, if a product has an average weekly usage of 100 units and one part in the product has a cumulative lead time of 16 weeks, you know that you will have the equivalent of approximately 1600 units in the pipeline somewhere.
22
Inventory Exposure Turns Inventory Exposure Turns = Cost of Goods Sold / Inventory Exposure This is just the inverse of Exposure Percentage. It has the same characteristics and is simply another way to view the data. One interesting note is that a companys inventory turns should always be higher than its Inventory Exposure Turns.
23
Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iSeries, pSeries, xSeries, zSeries, eServer, z/VM, z/OS, i5/OS, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Adobe, the Adobe logo, Acrobat, PostScript, and Reader are either trademarks or registered trademarks of Adobe Systems Incorporated in the United States and/or other countries. Oracle is a registered trademark of Oracle Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warrant.