Optimising supply chains using SAPs integrated SCM business suite

OPTIMISING SUPPLY CHAINS

-USING APS INTEGRATED

SCM BUSINESS SUITE

OUR MISSION IS TO HELP YOU

To work in partnership with our clients, radically improving their operational excellence, business

process throughput and resource efficiency.

To enable business success by delivering powerful supply chain and warehouse management solutions that incorporate SAP, technology and best practice.

Presenter: Mat Eames

Date: Feb 2010

Copyright © Rocket Consulting Limited 2010.All Trademarks are hereby acknowledged. This document contains information that is proprietary to Rocket Consultingand must not be disclosed in whole or in part to any third party.

Seminar Objectives Introduction to Rocket Consulting Supply Chain Challenges SAP Supply Chain management (SCM)

What is SAP SCM? Enhanced Warehouse Management (EWM) Transportation Management (TM) Supply Network Collaboration (SNC) Event Management (EM) Auto-ID infrastructure

Conclusion Solutions to real world challenges – The Rocket Approach

Agenda

Seminar Objectives

Optimising Supply Chains using SAP’s integrated Supply

Chain Management (SCM) business suite

Seminar Objectives

An overview of how the different components of SAP's Supply Chain Management (SCM) software can:

Apply to real world challenges Create opportunities for cost savings and efficiency gains

  The seminar will provide an insight into how the

components of SAP’s SCM supply chain products can:

Drive efficiency Improve communication Increase availability of information Remove cost from a wide range of supply chain activities

Introduction to

Rocket Consulting

"Rocket has helped transform our

operation, introducing efficient material

flows and effective working practices

that have allowed us to significantly

increase throughput, improve stock and

picking accuracy, and further improve

on customer service."

Andy Lilley, Chanel Operations Director

Rocket Consulting

YOUR MISSION IN OUR CONTROL / ORBIT AND BEYOND ...

Rocket Consulting is a specialist SAP consultancy, and official SAP partner

Dedicated to helping businesses meet the increasing demands of today’s supply chains and warehouse operations

Delivering optimised and adaptive supply chain solutions through extensive and deep knowledge of SAP’s software, complementary technology, best practice process design and our own specially designed SAP add-ons called Rocket Packs

Used by major companies across the globe, Rocket is highly regarded for its professionalism, knowledge and expertise. With a proven track record of successfully delivering practical and effective results

Rocket’s core SAP capabilities

SAP

ERP

Logistics Execution

Warehouse Management

Extended Warehouse Management

Transportation

Yard Management

Retail Merchandise Distribution

Direct Store Delivery

SAP

SCM

Extended Warehouse Management

Transportation Management

Event Manager

Supplier Network Collaboration

Global Trade Services

Advance Planner & Optimiser

SAP

Technology

Mobile Solutions

(RF, GRPS, 3G)

Voice Directed Operations

Warehouse Automation

RF Identification (RFID, Auto-ID)

NetWeaver/BASIS

Rocket Packs

Innovation and R&D

Methodology

What are today’s

Supply Chain

Challenges?

Supply Chain Challenges

The last decade has witnessed:

Globalisation Increased competitiveness from multinational and highly specialised

companies A significant increase in globalisation across all industry segments due to

global competition Sourcing and manufacturing have migrated to the Far East resulting in

extended supply networks Geographically dispersed partners to bring products and services to

market Unrelenting pressure on costs and quality Long and costly supply pipelines Shrinking capital availability driving lean manufacturing and supply

operations Difficulties with communication, mutual language compatibility, time

zones, seasons and holiday calendars add complexity and potential for supply chain failure

Supply Chain Challenges

The last decade has witnessed:

Trade Environment Political instability is affecting strategic sourcing decisions Tariffs and unpredictable currency fluctuations creating constant review

of sourcing decisions Changes in legislation and significant world agreements (CFC’s, Fair

Trade, CO2 emissions, Tariff areas, Trade blocks e.g. NAFTA, EFTA, EU..etc)

Volatile fuel, energy and transportation costs Pandemics (SARS, Swine flu, BSE, Foot and Mouth, Blue tongue, etc.)

impacting on willingness to travel, training, supervision, inspection and concerns with food products

Guaranteeing minimum standards (Baby milk, human rights, chemical additives and compliance)

Supply Chain Challenges

The last decade has witnessed:

Innovation Cycle and Time to Market Demand for innovative and fashion products have driven down

innovation cycles and time to market Extended supply chains compromise the ability to react to market

changes and customer requirements (product lead time cycles etc),

Technology Increasing use of technology and automation (reduced flexibility, higher

training costs) High cost of intercompany communication as strong and compulsory

supplier involvement in Original Equipment Manufacturer (OEM) product development becomes necessary

Need for effective integration of design of transactional systems to remain competitive

Ever increasing influence of Web enabled technologies as cost, reach and availability extends

Consolidation of disparate legacy systems to drive down total cost of ownership and improve system integration

Supply Chain Challenges

Customers More demanding (and less tolerant) customers who insist on higher

levels of responsiveness, collaboration and visibility Customer require suppliers and contract manufacturers to be integrated

into the supply chain with improved and more cost effective products Customers are armed with detailed information about the real cost of

manufacture and value of products which is reducing customer loyalty

Supply Chain Challenges - summary

Remove cost, improve delivery performance and better manage exceptions - Need to transform existing linear, sequential supply chain into a responsive supply network

Reduce costs while improving quality and customer service throughout the supply chain - Integrate the design, sourcing, supply, stocking and delivery with the full supply network

Reduce time to market, eliminate costly errors and false starts - Promoting closer collaboration, planning, execution, and coordination throughout the supply network

Improve the probability of successful business expansion - Addressing separate specific business challenges with their own timelines and without costly system upgrades

World class product, process and supply chain performance - Develop processes which are customer-centric, demand-driven, enabling knowledge sharing between partners

Reduce system cost and increase system integration – Adopt a functionally rich common system platform which meets flexible business process requirements without costly support models

Supply Chain Challenges - summary

Introduction to SAP

SCM 7.0 -

Supply Chain

Management

What is SAP SCM?

The SAP Supply Chain Management (SAP SCM) application automates business processes across and beyond enterprise-wide operations.

Delivers large range of new and improved functionality

Supports end-to-end processes that address the unique business demands of more than 25 industries.

It enables: Improved user productivity Faster and more cost-effectively business process change The leveraging of existing IT investments

SAP Supply Chain Management (SCM)

What is SAP SCM?

SAP SCM is a product set that:

Is part of the SAP Business Suite which is integrated with the SAP Enterprise Resource Planning (ERP) system

Is a complete supply chain management application that: Helps link systems for tighter integration of planning and

execution Quickly incorporates partner solutions for greater

efficiencies

Enables the collaboration, planning, execution, and coordination of an organisation’s entire supply network

Can be deployed in all industry sectors to address specific business challenges without costly upgrades.

SAP SCM utilises SAP NetWeaver® technology which unifies

all technology components onto one platform

SAP Supply Chain Management (SCM)

The main products that make up the SAP SCM suite are:

Planning - APO (Advanced Planning Optimisation)

F&R (Forecast and Replenishment for retail)

Collaboration - SNC (Supply Network Collaboration)

Execution - EWM (Enhanced Warehouse Management)

TM (Transportation Management)

Auto ID (RFID and sensor integration)

GTS (Global Trade Services) Coordination -

EM (Event Manager)

SAP SCM (Supply Chain Management)

SAP SCM (Supply Chain Management) - Solution Map

Demand & Supply Planning

Demand Planning & Forecasting

Safety Stock Planning

Supply Network Planning

Distribution Planning

Service Parts Planning

Manufacturing Production Planning & Detailed Scheduling

Manufacturing Visibility MRP-Based Detailed Scheduling

WarehousingInbound Processing

& Receipt Confirmation

Outbound Processing

Cross DockingWarehousing &

StoragePhysical Inventory

Transportation Freight ManagementPlanning & Dispatching

Rating & Billing & Settlement

Driver & Asset Management

Network Collaboration

Real World Awareness Supply Chain Event Management Auto ID/RFID & Sensor Integration

Supply Network Collaboration Supplier Collaboration Customer Collaboration Outsourced Manufacturing

SAP SCM (Supply Chain Management) – next steps

Functional overview of a few of the SAP SCM components:

Extended Warehouse Management (EWM)

Transportation Management (TM)

Supply Network Collaboration (SNC)

Event Management (EM)

SAP Auto-ID

Introduction to

EWM 7.0 -

Extended

Warehouse

Management

EWM Overview

What is AP Extended Warehouse Management (EWM)?

EWM is the latest Warehouse Management System (WMS) software product from SAP and is an entirely new solution built from the ground up based on SAP’s extensive experience in Warehouse Management solutions

Aimed at challenging best of breed products

EWM offers flexible, automated support for processing various goods movements and for managing stocks inside the warehouse

The system supports planned and efficient processing of all logistics processes in your warehouse

EWM Overview

The below functions are included in EWM and these facilitate

business processes with high levels of complexity and detail: Inbound

Slotting ASN Validation & Correction Internal Routing (Simple and Complex) Returns / Reverse Logistics

Internal Resource and Labour Management Yard Management Foreign Trade / Bonded Warehouse Warehouse Analytics

Outbound Wave Planning & Management Warehouse Orders Kitting (to Stock & Order) Cross Docking

EWM Overview – Slotting

Finding the best location in the warehouse based on product demand (fast changing) and product dimensions.

Slotting Processes

Find and optimise bin

Storage conceptProduct master

updatesRearrangement

Slotting automatically determines a storage concept for a product

Can automatically update product master

Links into the rearrangement process

EWM Overview – Wave Planning & Management

Wave Planning based on flexible conditions Now runs at item level inside deliveries and according to flexible

criteria

Wave Creation Control amount of work released to the warehouse floor at a specific

time Automatic, Immediate or Manual release Full or Partial delivery may belong to a wave

Grouping by route, pick area(s), packing lanes...

Wave creation WM request WaveWarehouse orderX WM requests

Bundle assigned to worker

EWM Overview – Resource Management

Resource management is concerned with the handling of resources in the warehouse to enable the effective monitoring and controlling of resources.

Maximises the efficiency of warehouse processes by: Facilitating the management and distribution of work via queues

Both RF and non RF Optimising the selection of warehouse orders for resources requesting

work

Resource Controlling and Monitoring allows managers to:) Analyse resource workload Monitor work order execution by resources Send messages to resources

Provides visibility of stock on resources in the warehouse

EWM Overview – Labour Management

Labour Management is used to better manage the time and productivity of warehouse workers. It consists of the ability to plan, measure, view, and simulate labour activities.

EWM Labour Management facilitates the management of

time and productivity of warehouse workers through:) Measurement and KPI’s Planning and Simulation Visualisation

A BPicking task

Collect pallet

Pick stock

Wrap pallet

Drop off

Detailed Productivity

KPIs

EWM Overview – Warehouse Analytics

Warehouse Monitor Central tool for keeping warehouse managers constantly up-

to date as to the current situation in the warehouse and to

enable them to initiate appropriate responses accordingly

Graphical Warehouse Layout Tool Graphical Layout of the warehouse storage per level that can

also show conveyors, resources and stock levels

Warehouse Cockpit Intended for Supervisor and Warehouse Manager Monitors team performance Monitors the performance of areas or the whole warehouse At-a-glance view of several key figures enables you to

quickly react to critical situations

SAP SCM EWM is designed to provide the following benefits:

Maximise the space utilisation of the warehouse

Maximise resource utilisation to best meet the operational requirements

Efficient and reactive labour management tools

Standard KPIs and measurement tools to drive productivity gains

RFID Enablement standard in EWM

Scalability & Flexibility Ability to handle a variety of supply chain business processes

Entitled Party to Dispose Designed for 3rd Party Warehouse Operations where stock

ownership must be managed and executed separately

Strategic fit with own technologies; SAP and non-SAP

EWM Overview - Benefits

Introduction to

SAP TM 7.0 -

Transportation

Management

SCM Transportation Management

Transportation Management is the latest transportation offering from SAP

The TM application enhances the ERP Transportation

solution, providing new functionality to: Improve the planning, scheduling and dispatching of

transportation orders Improve collaboration with logistics service providers Better manage freight costing and settlement processes

It can also: Automate and optimise transportation decision making Deliver real-time event notifications for underlying processes

SCM Transportation Management - overview

Transportation Management

Freight Management

Transportation dispatching

Transportation execution

Transportation charging

Freight Management: All activities related to the transportation request, taking and

updating of these requests

Transportation Dispatching (Planning): All activities before the start of the actual movement of the

goods

Transportation Execution: All activities during and after the actual movement including the

printing of documents necessary for the transport and also track

& trace

Transportation Charges: All activities related to transportation charge calculation, billing

and settlement

Example functionality.....

Collaborative Transportation Planning Intelligent Route Scheduling Optimised Load Building and Resource Scheduling Transport Documentation Event Management Returns and Reverse Logistics Modelling and bench marking of carriers Tariff Management and Invoicing Financial Consolidation and Reporting options Efficiency and Profitability Analysis

Core Transportation Management Processes

TM Overview – Optimisation

Finding the most cost effective and resource efficient solution to transportation activities within a supply chain network.

Optimisation Processes

Logical grouping of freight units

Transportation lane

determination

Transportation Service Provider

selection

Execution document

creation

Optimisation automatically determines the most logical grouping

of freight units to support loading activities

Considers resource constraints and incompatibilities

Determines the optimal drop sequence in the network

Proposes a transportation service provider based on cost

efficiency or partnership criteria

Considers historical planning data to propose the best solution

TMTM Overview – Optimisation

Multiple optimiser profiles support differing requirements in

Transportation Planning scenarios: Optimise on least cost decisions Optimise on strategic transportation service provider selection Optimise on realistic resource usage Optimise on long or short term planning horizons

Optimiser results can provide proposals for transport managers to

choose execution decisions or to automate execution for follow on

activities

Optimisation can be run in real time by the user or as a background

batch process

Graphical display of optimiser cost decisions enhances the decision

making process for the transportation planner

What Are Benefits of implementing a Transportation Management Solution?

Collaboration with range of suppliers reduces delivery lead times

Enhanced TSP /carrier selection to get best price

Optimised automatic decision making reduces manual workload

Superior resource utilisation

Effective resource management

Higher visibility of the transportation supply chain

Tools and the ability to better react to supply chain changes

Comprehensive charge management and freight invoicing

Collaborative track and trace functionality

Introduction to

SAP SNC 7.0 –

Supply Network

Collaboration

Supply Network Collaboration (SNC)

Supply Network Collaboration (SNC) is a component of SAP SCM, based on the Web Portal concept it provides:

Suppliers – Access to supply chain information and tools to synchronise supply with demand, acknowledge purchase Orders, create Advanced Shipping Notifications (ASNs), receive Proof of delivery (POD) and post invoices

Customers – Capabilities for integrated replenishment and vendor managed inventory (VMI)

Contract manufacturers – Seamless access to supply chain information by extending visibility and collaborative processes to their manufacturing processes

Supply Network Collaboration (SNC) - Overview:

The supplier/customer accesses the SNC using a web browser and the “Supplier” or “Customer” does not require an electronic data interchange (EDI) infrastructure to integrate into the users supply network.

Can be deployed as a standalone application or it can be integrated with SAP or non-SAP back-end solutions on either the customer or supplier side

Can be operated in a hosted environment for all business partners involved in the inventory collaboration process

SNC supports the following business processes: Responsive Demand Planning Responsive and Dynamic Replenishment Planning Purchase Order Processing Supplier Managed Inventory with Replenishment Order Processing Delivery Control Monitor Invoice & Self-Billing Processing

Supply Network Collaboration (SNC) - Purchase Order Processes

Purchase Order

Processes

Reject Purchase Order

Confirm Quantity and date

Approve Changes

Creation of ASN

Good receipt

information and

POD

Invoice Collabora

tion

Purchase order details are published on the SNC Portal Purchasing information published using the portal is secure Purchase order details are checked and confirmed by the supplier with a browser Information is presented in the suppliers language using Supplier part numbers Supplier is alerted by email that the purchase order has been published Subcontracting and 3rd party works order processes are supported

Supplier confirms details such as delivery date and quantities Changes to the purchase order can also be sent for approval

Supplier creates advanced shipping notification (ASN) using the portal ASNs can be packed The supplier can use EDI or a spreadsheet interface into the

SNC portal to improve efficiency and accuracy

Supply Network Collaboration (SNC) - Purchase Order Processes

Purchase Order

Processes

Reject Purchase

Order

Confirm Quantity and date

Approve Changes

Creation of ASN

Good receipt

information and

POD

Invoice Collaborati

on

Supplier is informed when the products are receipted Proof or delivery (POD) documentation is issued allowing the supplier to see

quantity or quality differences

The supplier can post invoices on the portal using a web browser Purchase Order and ASN relevant invoices can be created by the supplier Goods receipt (GR) and non GR relevant processes supported Approval and rejection invoice statuses give the customer control Self billing processes are supported

Monitoring Purchase Order process Both parties can monitor the purchasing process and add notes Alerts and emails can be used Inventory can be updated and monitored by the supplier

Supply Network Collaboration (SNC) - Benefits

The SNC solution helps address the supply chain challenges of quicker, accurate communication and tighter integration with business partners.

The benefits of integration are:

Manual labour for supplier and customer communication reduced Errors in supplier and customer communication can be eliminated Communication cycles are shortened Low cost but highly effective integrated processes develop A consequential reduction in stock levels Reduced effort and cost expediting Supplier managed inventory (SMI) reduces planning effort Exception based management can be implemented Reduced supplier call volumes Highly integrated SMI scenarios can be offered to customers Improved efficiency for inbound receipting

Introduction to

SAP EM 7.0 -

Event Management

SAP Event management

Provides monitoring capability to any process Enables actual to planned comparisons Allows management by exception Provides data for performance reporting outside SAP

Visibility for process Who is doing what and when Location details where is the event being performed Measurements weights, volumes or temperatures Tracks status changes to business process

Visibility of assets Inventory Supply chain Assets

MONITOR AND

TRACKNOTIFY

ADJUSTANALYSE

Is an application to manage and monitor events within and between organisations

SAP Event Management - Overview

Monitor and Track

SAP Event Management:

Monitors and tracks actual events against relevant expected milestones within a process

Processes could include but are not limited to: Tendering of a load Goods issue of a pallet Departure of a truck Receipt of the goods at the customer’s location Movement of transportation vehicles or containers

MONITOR AND

TRACKNOTIFY

ADJUSTANALYSE

Notify

Event Management can notify a predefined set of users or partners and supply them with information needed to resolve the situation either locally, or collaboratively, with several partners.

SAP Event Management can provide: Exception management Personalised views of events Appropriate viewing rights Manual and automatic exception

resolution

MONITOR AND

TRACKNOTIFY

ADJUSTANALYSE

SAP Event Management - Overview

SAP Event Management - Overview

Adjust

Late shipment; If a Shipment departs late and is too late to reach the scheduled ocean carrier - SAP Event Management can suggest air transport or waiting for the next ship – and offers evaluations of the options proposed.

MONITOR AND

TRACKNOTIFY

ADJUSTANALYSE

Business event resolution enables individuals to act on significant events (alerts) and take corrective measures in the right work context

for example:

SAP Event Management - Overview

Analyse

the KPI “perfect order fulfilment” measures whether a customer received the exact quantity of the product ordered, on the date (and time, if necessary) when it was requested

To provide high-integrity metrics, a delivery event would be used to capture the exact time and date of delivery at each customers location

MONITOR AND

TRACKNOTIFY

ADJUSTANALYSESAP Event Management captures and stores specific event context and time-specific data. This can feed summarised statistical information to the Business Information component automatically updating KPI’s, for example:

SAP Event Management Benefits

Enables actual to planned comparisons

Allows management by exception

Improved customer service through ‘alert’ notification and

automated resolution

Provides data for performance reporting and KPI’s external to

SAP

Reduces response time to supply chain problems

Uses the Netweaver technical infrastructure

Directly linked into other SCM components

MONITOR AND

TRACKNOTIFY

ADJUSTANALYSE

Introduction to

SAP Auto-ID 7.0 -

RFID and sensor

integration

SAP Auto-ID

SAP solutions for Auto-ID & item serialisation enable the use of RFID or sensors to automate business processes.

They provide accurate real time information about items as they move through the supply chain.

In summary: Automatically integrates identification technologies (barcodes,

RFID, etc) with existing SAP ERP software systems

Convert raw reader data into business transactions and set up a rule-based mechanism to handle its tasks

Use preconfigured processes for outbound processing, inbound processing and returnable transport item management

SAP Auto-ID - overview

Key Features:

Mapping and rules processing – Map messages arriving from devices on the plant or warehouse floor to

determine what event has occurred and what sequence of activities to

execute Activities that match business requirements –

Perform specific actions such as validations, updates, and

communications; modify existing activities or create new ones to match

needs Routing engine –

Map interpreted data to the relevant business objects inside SAP and

non-SAP applications to facilitate automation of business processes Pre-packaged, configurable support for business processes –

Deploy preconfigured processes or configure the software to meet

specific requirements

Benefits of SAP Auto-ID

By optimising warehouse processes using sensors or RFID

technology the following benefits can be realised:

Improved operational efficiency Through automated data discovery and automated event

processing

Reduced error handling Through automated scanning and data capture

Higher customer satisfaction Resulting from more accuracy and speed in shipping, receiving,

and handling operations

Improved supply chain management Through better efficiency and visibility throughout the entire supply

chain

Lower costs and higher ROI With scalable solutions that are viable for the long term

SAP SCM 7.0 -

Conclusion

Summary

This seminar has provided an overview of how some of the different components of SAP's SCM (Supply Chain Management) software can:

Achieve world class customer service – by implementing a suite of leading edge components providing superior supply chain logistics and operational performance

Create opportunities for cost savings and efficiency gains – by providing KPI’s and management information to exploit the enhanced communication, processes and functionality

Improve exception management (with consequential reduction in non-conformance) – by providing tools to manage, monitor and communicate exceptions

Reduce errors in supplier and customer communication – by tightened integration between business partners resulting from the use of Web portals and open communication technologies

“Real world challenges can be addressed by providing a responsive real-time supply network”

Supply Chain Challenges - Conclusion

The benefits offered by implementing the SAP SCM solution to meet the supply chain challenges are:

Superior supply chain logistics and operational performance

Tighter integration between business partners Enhanced supply chain functionality Responsive real-time supply network Event and exception management capability Single web enabled technology platform

These improvements and solutions to the supply chain

challenges can be realised by exploiting the functionality of the

latest SCM software

The Rocket Innovation Approach

ASSESSMENT

INITIATIVES & OPPORTUNITIES

EXPERIENCE

PARTNERS

R&D PROTOTYPING

ROCKET PACKS

DEMO SYSTEMS

SUPPLY CHAIN CHALLENGES

Aviation Beverage FMCG/CPGLogistics & Distribution

ManufacturingPharmaceut

ical & Medical

Retail

Demand & Supply PlanningDemand Planning &

ForecastingSafety Stock

PlanningSupply Network

PlanningDistribution Planning

Service Parts Planning

WarehousingInbound Processing

& Receipt Confirmation

Outbound Processing

Cross DockingWarehousing &

StoragePhysical Inventory

Transportation Freight ManagementPlanning & Dispatching

Rating & Billing & Settlement

Driver & Asset Management

Network Collaboration

Real World Awareness Supply Chain Event Management Auto ID/RFID & Sensor Integration

Supply Network Collaboration Supplier Collaboration Customer Collaboration Outsourced Manufacturing

Our Relevant Experience

To take off with Rocket by contacting us launch@rocket-

consulting.com to discuss how these improvements and

solutions to the supply chain challenges can be realised

by exploiting the functionality of the latest SCM

software

www.rocket-consulting.com

Copyright © Rocket Consulting Limited 2010.All Trademarks are hereby acknowledged. This document contains information that is proprietary to Rocket Consultingand must not be disclosed in whole or in part to any third party.