Raghu SAPPHIRE Presentation - 2010

7/27/2019 Raghu SAPPHIRE Presentation - 2010

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Company Confidential

Introduction and Key Business Drivers for CTB


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Need to ramp up / down to match changing market demand

4

Extended Supply Chains

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

Fluctuating Demand

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

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


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S&OP Capabilities - High-Tech Industry Concerns

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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

Gap to Average

Gap to Q1

Potential Benefits:

Value of Closing the Gap to Peer Group P1

Performance Results Key Metrics

Key Observations

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

Effectiveness

Efficiency

(n= 20) (n= 87)

Efficiency: FTE Saving per billion of total spend

(in millions)

First QuartileBetween Average and First QuartileBelow Average OutlierRanking:

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

Type Metric Company

Peer Group P1 Peer Group P2

Avg. Q1 Avg. Q1

% Customer Fulfillment Rate Direct 88.0 90.8 96.1 88.2 93.4

% of Spend Managed

Strategically

Direct 70.0 76.2 98.3 68.5 92.9

Indirect 25.0 32.4 60.0 48.9 77.9

Services 80.0 42.6 78.6 48.0 82.8

% of Maverick Spend

Direct 5.0 4.9 1.1 8.6 1.5

Indirect 10.0 12.9 1.6 15.5 2.9

Services 10.0 9.9 3.6 13.4 2.8

% Spend Sourced via e-

Auctions

Direct 15.0 14.5 56.7 6.3 25.4

Indirect 5.0 6.0 16.7 8.3 33.7

Services 50.0 * * 6.9 28.3

FTEs per Billion of Total Spend (Overall) 208.3 147.7 62.1 113.9 34.5

% of Time Spent on Transactional Activities 40.0 52.6 34.1 54.7 30.3Efficie

ncy

Effectiveness

Effectiveness: CFR Revenue Impact (% increase)

14.6

6.1

8.1

2.8

Source -SAP

Value Engineering


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Solution Features


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Brand owner

Ramping up Demand seen in the next few months,

Can I build to fulfill Demand ?

A dashboard on Customer demand fulfillment possibilities

Clear to Build Dashboard Know your Fulfillment Capability

Components Supplied to

Manufacturers for Finished

Goods

Assembly sites in

an outsourced

location

Need feedback on ability to scale up to

Demand


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Clear to Build Dashboard To what extent can I fulfill

Dashboard to provide visibility of

demand versus committed supply

across entire supply network with

quickMRP simulation facility

Quick information on impact of

demand variation on supply capability

of CMs/ Suppliers

Leverage SAP APO CTM engine for

material constrained planning and

availability check (MRP Simulation)

Leverage SAP SNC for component

stock availability at CM / Supplier

location

Detailed visibility of constrained

components represented

geographically

Available in xCelsius and WebDynpro

formats

Know your capability to fulfill

demand in the future


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Product Architecture

ECC

GUI

Clear to Build Solution

Stock

SNC

Supply Network Inventory

Leverages SAPs Supplier Network Collaboration solution

to view component inventory at CM location

Integration to SAP APO for running SNP

simulations

APO

Advanced Planning andOptimization

BOM Demand

CTM Engine

Receipts


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Understand Current Demand Supply Match

Double click location product to

simulate demand change in nextscreen

Review and Forecast

and Can- Build data

Enter Selections

and select Go


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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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Key Benefits of the CTB Solution

Capability Benefits

Manage ability to fulfill

Demand

Measure ability to fulfill demand of different Finished

Goods

Simulate Demand SwingsSimulate the ability to fulfill Demand for Finished Goods

in the future with different ramp up scenarios.

Minimize future SC glitchesView potential glitches in the SC Demand ramp up

capability.

Reduce lost opportunitiesand 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

Step 1

Step 2

Step 3

Step 4

Expert Virtual Roundtable : Initial conference with customer tounderstand Network visibility and available to promise needs, current

landscape and challenges

Complementary Value Assessment Workshop: Consulting offer toassess 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 Patnissand box system using customer data & scenarios. Review & Signoff of

detailed deployment road map

Value Based Implementation: Key features include fixed price DeploymentContract, SCM solution and Integrated Capable to Build

Raghu SAPPHIRE Presentation - 2010

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