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The SAP S/4HANA Business Case: Supply Chain

Management
ASUG, April 21, 2016

Michael Lipton, SAP: michael.lipton@sap.com


Carl Dubler, SAP: carl.dubler@sap.com
Todays Agenda

1. SAP S/4HANA and the digital core Michael Lipton, SAP


2. SAP S/4HANA and Line of Business Supply Chain Solution Management
solution extensions michael.lipton@sap.com
3. New capabilities for supply chain
4. Q&A

Next week (April 28): SAP


S/4HANA and HR Carl Dubler, SAP
Director, Product Marketing for
SAP S/4HANA
carl.dubler@sap.com

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The world is increasingly digital and networked

Last 2 years Last 2 years

90% 40%
Of the worlds data has Growth in adoption of
been generated1 business networks2

End of 2020 By 2020 In 2014

212 billion 9 billion 51%


Things will be connected3 Mobile users in the world4 Of workloads processed
in the cloud5

1 ScienceDaily, May 22, 2013. 3 Internet of Things (IoT) 2013 to 2020 Market Forecast: Billions of Things, Trillions of Dollars, IDC, 2013. 5 Cisco Global Cloud Index: Forecast and Methodology for
20132018, Cisco Systems Inc., November 11, 2014.
2 Technology Adoption Report on Business Networks, Ardent Partners, 2014. 4 Statista, 2014.

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Complexity is costly and Legacy Applications cant cope with it!

Scattered information Batch orientation Technology limitation

Complex decision making Complex business processes Complex technology


businesses often struggle to bring Organizations spend between 40% and 73% of executives said the
good ideas to the marketplace 80% of their time on non-value-added complexity of data is the largest
profitably. activities IT challenge
(McKinsey, 2014) (BCG, Complexity Report) (Forrester, 2013 report)

10.2% or $237B*
of profits lost by top 200 global companies due to hidden costs of complexity
*Global Simplicity Index, 2013

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Carls equation for expressing SAP S/4HANA value
Key components for generating interest

Simpler data model + improved UX = new capability


Unified data model
Drill down to detail Continuous soft
Example eliminates FI-CO
and KPI cockpit close
batch reconciliation

Transactions run Instantly-refreshed Reduced processing


Example
without table locks KPIs time & carrier fees

Tools to help: Business Scenario Recommendations, Trial Editions, and


Use Case Series on SCN
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Use Case Inventory Management: Business Pain
E.g. International Car Manufacturer

Locked tables prevent movements


7
Car Models No parallel postings

Multiple tables, inconsistent information


550 High volume back flush = batch jobs and bulk postings
Daily output per model
with delay


3,500 Auto ID technology > queue

BoM materials No realtime transparency on stock and on exact


per model, on 10 levels, 60% common parts
material flow: how to identify defective parts

480 No actual costs and intercompany profit transparency


Trucks per day Need to split system load into multiple distracted
systems
>20,000,000
Material movements per day

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SAP S/4HANA: Customer momentum across the globe
Customers are starting to drive digital transformation with SAP S/4HANA

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How S/4HANA supports line of
business solution extensions
SAP S/4HANA
Digitized core business processes

Key Capabilities

Real-time mission-critical business


processes across your entire enterprise,
One single source of live information
Personalized user experience with
instant insight on any device

Benefits

Faster business outcomes with reduced


operational cost thanks to a simpler IT
Increased competitiveness with integrated,
fast, and flexible business processes
Higher employee productivity with focus on
value-added tasks

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SAP S/4HANA, Enterprise Management and LoB Applications
Detailed business scope of the 1511 update
SAP S/4HANA SAP S/4HANA SAP S/4HANA
SAP S/4HANA SAP S/4HANA
FINANCE HUMAN RESOURCES SOURCING &
SUPPLY CHAIN MANUFACTURING
PROCUREMENT

Integrated Business Planning Automated Agile Manufacturing

Accounting and financial close human resources and payroll Supplier Collaboration Supply Chain Control Tower Manufacturing Integration and
Treasury and financial risk Talent management Business Network Integrated Business Planning Intelligence
management Time and attendance Extended Warehouse Mgmt Manufacturing Execution
Receivables management management Transportation Mgmt System
Integrated business planning Human capital analytics Genealogy / Traceability Plant Connectivity

Accounting and entity close Time capturing Supplier information and Manufacturing operations
Accounting SAP Success Factors master data Quality management and
Cost management and Employee Central connectivity Operational procurement compliance
profitability analysis Invoice and payables
Operational sourcing and

The Digital Core


The Digital Core

contract management

Enterprise Management

Product development
Service management
Commercial Project
Service master data
management Management
Order and contract Service parts management Portfolio and Project
management Service agreement management Maintenance Operations Management

Billing and revenue innovation Mobile Service Collaborative Product


management Predictive Maintenance Development
Sales planning Asset Networks Product safety and
and performance management Environment, health, stewardship
and safety Product Network

SAP S/4HANA SAP S/4HANA SAP S/4HANA


SAP S/4HANA SAP S/4HANA
MARKETING AND ASSET RESEARCH AND
SALES SERVICE
COMMERCE MANAGEMENT DEVELOPMENT

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SAP S/4HANA Supply Chain: Solution Strategy
CURRENT PLANNED 2016 FUTURE
SUITE SUITE SUITE

SAP Advanced Planning and Optimization SAP Advanced Planning and Optimization SAP Advanced Planning and Optimization
Customer and Supplier Collaboration Customer and Supplier Collaboration Customer and Supplier Collaboration
Extended Warehouse Management Transportation Management Transportation Management
Transportation Management Extended Warehouse Management Extended Warehouse Management
Supply Chain Event Management Supply Chain Event Management Supply Chain Event Management
Integrated Business Planning Global Batch Traceability Global Batch Genealogy and Traceability
SCM Control Tower Integrated Business Planning Integrated Business Planning
Supply Chain Control Tower Supply Chain Control Tower

PRODUCTS
PRODUCTS
Transportation Management
Extended Warehouse Management Extended Warehouse Management
PRODUCTS Finite Capacity Planning / Scheduling Finite Capacity Planning / Scheduling
Advanced rules based ATP (foundation) Advanced rules based ATP Advanced rules based ATP

Enterprise Management Enterprise Management Enterprise Management


Inventory management Inventory management Inventory management
Material valuation Material valuation Material valuation
Production Planning / MRP Production Planning / MRP Production Planning / MRP
Shipping, Receiving, Standard Warehousing Shipping, Receiving, Standard Warehousing Shipping, Receiving, Basic Warehousing
Standard ATP Standard ATP Standard ATP

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New Capabilities in S/4 HANA
for Supply Chain
Highlights of key business innovations in S/4 HANA

Re-architecting for
in-memory platform
Inventory Material Requirements Material
Management Planning Valuation

Responsive user
experience design
Sales Representative Procurement Clerk Material Planner
(Order Management & Billing) (Procurement) (Material Requirements Planning)

Unifying functionality
in core
Available-to-Promise & Capacity Industry Solutions
Backorder Processing Planning to Core

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Fiori User Experience

Traditional system With SAP S/4HANA

Ad hoc Ad hoc
With traditional system: Future Direction with SAP S/4HANA:
User User
Complex screens to cover multiple roles at once interaction interaction Simplified screens specific for different process steps
No support for casual users Role tailored apps supporting casual users
Runs on desktop only with limited browser support Responsive design running on any device
Technology and user experience breaks due to Java Plug-Ins or SAP GUI Traditional With SAP S/4HANA Unified user experience with SAP Fiori
Multiple enhancement points and technologies Single enhancement technology

User Experience

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SAP S/4HANA for Operations and Logistics Key Innovations
Available with Q4 2015 release except where marked are Q41016

Material Inventory Management Material Available To Promise & Capacity


Requirements Planning & Warehousing Valuation Backorder processing Planning
Simplified data model resulting New co-deployment bringing
Fast MRP run, and new in increased through-put, Principle of One, scalable Advanced ATP capabilities in PP/DS functionality inside S/4
working model for MRP flexible analytics at the most material valuation capabilities, S/4 HANA. New innovative HANA. Simplified and
controllers based on decision granular level. utilizing Material Ledger, that functionality for Re-scheduling automated integration with
support. way customers can use multi- orders based on customer and seamless master data & UI
Easy to adopt flexible currencies, valuation methods demand priorities and harmonization. Including
warehousing for basic through per different accounting laws advanced real time rules constrained planning and
advanced business needs. like GAAP. based order promising detailed scheduling

Order Management & Billing Procurement Include Industry


Solutions in the core
Enable monitoring of end-to-end order-to-cash process & Increased efficiency in
Bring Industry Solutions, like
take actions for any exceptions, information on the the Procure-to-Pay
the DIMP template (Discrete
exceptions to resolve the issues, lower TCO due to data processes, new
& Mill Industries) back into
model simplification, support for the most recent versions Analytical Apps &
core so all industries can
of business features such as FSCM Credit Management, Spend KPIs, Ariba
leverage the best practices
GTS Foreign Trade, SFIN Revenue Accounting, new Network Integration for
such as lean etc.
analytical capabilities. PO Order and IV.

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Simplification with S/4HANA:
Inventory Management Aggregates eliminated
Classic
NewSuite
Suite SAP S/4HANA
Delete redundant aggregate
Aggregates tables (26
Document of them)
History
Simplify to only 2 master tables Design principles
Foster in-memory technology
Inventory

Simply create aggregate views on the fly when needed


tables

MSTQ MSTE MSTB MCHB MKPF/ MSTQH MSTEH MSTBH MCHBH

Remove overhead of updating and locking and


MSEG
Utilize columnar data layout
processing unnecessary tables
MSKU MSKA MKOL MSPR MSKUH MSKAH MKOLH MSPRH

Target architecture
MSSQ MSSA MSLB MSSQH MSSAH MSLBH Eliminate redundancies and aggregates
Have a simple and high-performant
Material
master

reporting, both for quantities and values


MARC MARD MARCH MARDH
Reduce memory footprint
Performance:
Transactional
26 Ensure transactional context
data aggregate
tables
Master
data

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Example Innovations with S/4HANA: Material Requirements
Planning Cockpit

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Example Innovations with S/4HANA: Simplified
Production Planning and Scheduling
Sales MRP Run + Monitor
Interactive Release to Production
Order Constrained and
Planning Production Execution
Entry Planning Control

Current functional model Planned


Planned Improvements
HANA Platform UI Harmonization
APO-PP/DS incl. Live cache
PP/DS CIF Simplification
CIF

Master Data
ERP Harmonization
Analytics
ERP HANA Platform

HANA Platform incl. Live cache

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Available to Promise

Current functional model With SAP S/4HANA for Supply Chain


APO / gATP
Code Pushdown to HANA
Product Availability Check

Product Allocation Substitutions


Rescheduling Etc.
SAP S/4HANA
Product Availability Check
Data replication via CIF

Product Allocation Substitutions


ERP
Rescheduling Etc.
Product Availability Check

Product Allocation Substitutions

Rescheduling Etc.

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Sneak Preview S/4 HANA AATP Release for Delivery

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Warehouse Management: Pricing in S/4HANA
Distinct between licensed business process and deployed component

Price Element Process Scope Metric Component

Inventory Management User LE-WM*


Inbound Processing (covered by Today
Basic Warehouse Outbound Processing the S/4HANA EWM
Planned LE-WM* or
Management Internal Warehouse Movements Enterprise Embedded

Physical Inventory Mgmt. Future EWM


Reporting License) Embedded

* Part of compatibility pack

Inventory Management Optimization


(e.g. Slotting)
Inbound Process Optimization
Extended Warehouse
(e.g. Deconsolidation)
Management Today EWM
Outbound Process Optimization (e.g. Waves)
Material Flow Control EWM
Yard Management (e.g. TU handling, DAS) Item Planned EWM
Embedded

Labor Management EWM


Future EWM
Extended Warehouse Value Added Services Embedded
Kitting
Management S/4HANA Cross Docking
Warehouse Billing

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S/4 HANA Outlook: Planned Innovation
Supply Chain integrated with S/4 HANA

Supply Chain Planning Integrated Business Planning (IBP) Supply Chain Execution Platform
(On-Premise Deployment) (New, Unified Platform for Cloud Deployment) (On-Premise Deployment)

Advanced Planning & Optimization Supply Chain Control Tower Warehouse Transportation
(APO DP, SNP, PP/DS, GATP) Management Management
Sales & Operations Planning
Supply Network Collaboration (SNC) Supply &
Demand Inventory Track & Trace
Response
SAP HANA Platform SAP HANA Platform SAP HANA Platform

S/4
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Q/A
Wrap-up
SAP S/4HANA Product Roadmap and Where to Find More
Information

SAP S/4 HANA Roadmap on SAP Service Marketplace


The roadmap is organized in the Lines of Business structure

Information can be found in the 8 LoBs and Industries which it touches:


Supply Chain
R&D/Engineering
Manufacturing
Asset Management
Sales
Service
Sourcing & Procurement
Sustainability

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Where to find more information

SAP S/4HANA SAP S/4HANA


landing page trials
sap.com/s4hana sap.com/s4hana-trial

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Thank you
Contact information:

Michael Lipton
SAP Solution Management: Head
Supply Chain Strategy and Solution
Architecture

Email:
Michael.lipton@sap.com
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