Retail & CPG: Sustainable Sourcing for Branded and Private ...

Retail & CPG: Sustainable Sourcing for Branded and Private Label

September 28th 2021

Florian Seebauer, SAP SE

Agenda

Industry Trends

Big Picture

Direct Sourcing Process Flow

Supplier Collaboration related to specifications

N-tier visibility

Customer success

Why SAP?

Q&A

3© 2021 SAP SE or an SAP affiliate company. All rights reserved.

The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This

presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue

any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This

document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and

functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is

not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any

kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-

infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors

or omissions in this document, except if such damages were caused by SAP´s willful misconduct or gross negligence.

All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not

be relied upon in making purchasing decisions.

Legal disclaimer


Being best run means running sustainably, despite supply chains becoming more complex

Limited real-time intelligence

Lack of multi-tier visibility

Lack of transparency

Direct customers

Channel sales

Supply chain complexity

Increasing regulations

ONE INDUSTRY ESTIMATE SUGGESTS THAT 29 COMPANIES ACROSS 18 COUNTRIES NEED TO COLLABORATE TO MAKE “ONE HUMBLE CUP” OF COFFEE

Economist, If you thought the trade war was bad for global commerce, 26 March 2020 edition

https://www.economist.com/finance-and-economics/2020/03/26/if-you-thought-the-trade-war-was-bad-for-global-commerce


Important trends are transforming the retail industry, creating new

challenges

Consumer

preferences are

changing

New business models

are emerging

Competitors are

transforming

“How can I connect the supplier onboarding and

qualification processes with strategic sourcing?”

“How can I drive compliance to regulatory and

environmental requirements?”

“How can I bring products to market faster?”

“How can I source private label articles and collect

all the relevant article attributes from the supplier

and use them in my core retail process?”

Regulatory and corporate

social responsibility

requirements are evolving


Private Label Products

“Retailers earn 25–30 % higher

gross margins on private labels

versus manufacturer brands.”

Nirmalya Kumar, Professor of marketing at Singapore

Management University

Private Label products helps

retailers to differentiate

from competitors and can

create customer loyalty


Private Label Products

“According to IRI, 70% of millennial women see

store brands as having excellent quality, while 80%

of all shoppers believe that private label brands are

equal to or better than national brands in terms of

quality and packaging.”

Forbes

“Thus, they expect personalized

interactions with brands over

impersonal mass messages which

are often irrelevant.”

Sahir Anand, Research and Strategy at

Ensemble IQ


Trends and challenges in process manufacturing industries

Ensuring compliance to evolving

regulatory and corporate social

responsibility requirements

Tracking and reducing

material, packaging and

product costs “How can I improve commodity management team

productivity?”

“How can I drive compliance to regulatory and

environmental requirements?”

“How can I obtain supplier input to improve

product and recipe quality and costs?”

“How can I get more visibility into projected and historic

product and direct materials costs?”

Collaborating with suppliers

on product development and

quality

9PUBLIC© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ

SAP Ariba and SAP Fieldglass complement the Digital Core for Retail clients

e-Sourcing

e-Bidding

Auctions for

direct and indirect

materials

and services

Supplier Discovery,

Registration,

Qualification,

Classification

§

Contract from

Sourcing,

Contract Authoring,

Contract Repository

Supplier Risk

Management

with alerts

Cloud Catalogs

Spot Buy from

Marketplaces

Guided end-user

requisitioning,

Spot Quotes,

flexible e-forms

&

External Worker

Management

by

Commerce

Automation

ARIBA NETWORK

E-collaboration

for orders and

invoices

Inventory

Management

Pricing /

PromotionsMerchandise

SupplyOrg Structure

Master Data

Requirement

Planning /

Forecasting

Store OperationsDC Logistics

Finance and Cost Accounting

DIG

ITA

L C

OR

E

& SAP ECC

for Central Procurement

CIG

Invoice Verification &

SettlementS4 Sourcing and Procurement

and ECC-based MM-PUR


Speed time to market, lower cost of goods sold, avoid supply chain disruptions

SAP Ariba Strategic

Sourcing Suite

SAP Ariba Solutions for Direct Spend – Direct Sourcing Process & Retail

Supplier and risk management

Invoice and paySource and contract

ContractSourcePlan SellOrderRequest PayManageReceive

Buy and sell

CommitForecast

Plan

buyer supplier

ERP / SAP S/4HANAERP


Overview of SAP Ariba Strategic Sourcing Suite for use in direct spend

User experience + SAP Cloud Platform + ERP integration (SAP and non-SAP)

SAP Ariba Sourcing SAP Ariba Contracts SAP Ariba Supplier Lifecycle and Performance

Available innovations

Private Label

SourcingArticle

Article

Master

Integration

Integration

with IS-Retail

and S/4H

Category

attribute

hierarchy

Supplier

Alternatives

Product questionnaire

Continuous

quoting

Production

factory

Supplier qualification and segmentation

A new layer of innovations to support strategic sourcing


Private Label process from suppliers to the customer

Suppliers CustomersProduction Factory


Retail Sourcing Process

Ariba Network

Supplier /USE

SAP Ariba

Sourcing

ERP System

Sourcing

Source of

Supply

Supplier

AwardFruit Yoghurt

ID 132148

Country of

origin

Germany

Fruit

Percentage

10 %

Energy 150 kCal

Fat 10 g

Organic Yes

Milk Origin Germany

Shelf life 4 weeks

CustomerOther retail

systems

Packaging

Advertisement

Article

Master


Integrated Sourcing process with product specifications

Ariba Network

Supplier /USE

SAP Ariba

Sourcing

ERP System

Sourcing

Supplier

Award

SAP Product Content Hub

Any PIM

Fruit Yoghurt

ID 132148

Country of

origin

Germany

Fruit

Percentage

10 %

Energy 150 kCal

Fat 10 g

Organic Yes

Milk Origin Germany

Shelf life 4 weeks


SAP’s sourcing solution for the process industry and retail

Advanced retail and

private label sourcing

Analyze

Contract

Article

Integration

Generic article

and variants

Develop

product

idea

Collaborate on

specificationsIntegrate

ERP

Product

questionnaire

Category

attribute

hierarchy

API for PIM

integration

Automated

price requests for

perishables

Manage

Source

Sell

Category attribute hierarchy

▪ Automatically add event questions and item terms to line items based on category

▪ Ability to directly create content from the category attribute hierarchy in the UI

Product questionnaire

▪ Setup of category/region specific Product Questionnaires in an central library or

from an third party system

▪ Questions can be added dynamically to sourcing events

▪ Integration of supplier answers to 3rd party solution

API for PIM integration

▪ Integration to any Product Information Management (PIM) system

▪ Automatic incorporation of attribute information from PIM systems into sourcing

requests, and integration of received specifications back to PIM

Article integration

▪ Ability to upload Article Master into SAP and non-SAP systems

▪ Add articles to Sourcing events and Contract Workspaces

Generic article and variants

▪ Creation of article master data from multiple sourcing line items

▪ Integration to external systems

Automated price requests for perishables

▪ Ability for buyers to establish events that will run for a defined period of time and

automatically repeat on a defined schedule

▪ Events would have a comparison between the current and the pervious period

events, highlighting the significant pricing differences

▪ Supplier Dashboard and recurring reminders to provide quotes


Assessing and addressing supply chain risk with

multi-tiered supply chain visibility

Planned

Innovations


1) Geodis' 2017 Supply Chain Worldwide Survey.

However, the reality for many companies is another story….

n-tear visibility instead of n-tier visibility

https://hbr.org/2020/03/a-more-sustainable-supply-chain

https://www.geodis.com/fetch_resource.jspz?form_object=mmlelement&form_id=10085&property=image


The 3rd party factory feature allows buyers to achieve a complete view of their supplier’s supply

chain directly within the sourcing event. This information can be kept along the full purchasing

process by transferring it over to the follow-up contract workspace and ultimately to SAP ERP / SAP

S/4HANA.

3rd Party Factory support for supply chain visibility – Sourcing

Key benefits

▪ Gain visibility into the your suppliers supply chain early in the sourcing process

▪ Understanding of supply chain risk exposure before award decision

▪ Flexibility for buyers to define the supply chain depth required from suppliers in the sourcing event

▪ Seamless flow of supply chain information from sourcing to contract management and SAP ERP & SAP S/4HANA

Capabilities:

▪ New configurable question type “Factory” in sourcing events

▪ Option to load a central list of factory/partner “roles” (for example, “manufacturing plant”)

▪ Integration with SAP Ariba Supplier Lifecycle and Performance to store factory details and reuse information from previous events

▪ Visibility of 3rd party factory approval and/or blocking status in the sourcing event

Planned

Innovations


Sourcing process with supply chain visibility and new added 3rd party supplier

New entered 3rd

party factory is

checked for

duplicates

Supplier creates

response and

provides 3rd party

factory information

Supplier

awarded,

Factory send to

ERP and source

of supply created

3rd party factory

approved3rd party factory

added to

repository and

linked to supplier

Create and

publish

sourcing event

Gain visibility into the supply chain

of your suppliers early in the sourcing

process

Flexibility for buyers to define the

supply chain depth required from

suppliers in the sourcing event

Understanding of supply chain risk

exposure before award decision

Central Repository for 3rd party

factory for later reuse

Structured approval process for 3rd

party factories

Planned

Innovations


Retail use cases

Digitalization at

ALDI Nord

“With the introduction

of SAP sourcing, ALDI

Nord has taken an

important step on its

path toward

digitalization. This

includes a complete

standardization of the

tender process and

increased

transparency through

seamless, traceable

communication with

suppliers.”

Read the April 2019

press release here (in

German)

SAP at Coles

“Coles Group has tapped

SAP to transform its

operations across

procurement, human

resources and other

business processes. The

supermarket giant is

rolling out SAP

S/4HANA, along with

SAP Strategic Sourcing

for retail and SAP

SuccessFactors in order

to ‘gain new insights,

streamline and automate

its HR and procurement

processes and make life

increasingly easy for its

customers and team

members,’ SAP said

today.”

Read more in the

February 2019 CIO

article

Intermarché’s

private label

The French retail giant is

collaborating with its

suppliers to achieve

faster time to market and

full visibility and

traceability. It is also

ensuring aligned and

joint go-to-market and

support for its

environmental and

sustainability goals.

Learn more in their

CPO’s interview with the

president of SAP France

Standardized

processes and

sustainability at

ALDI SÜD

ALDI SÜD is using

SAP’s source-to-contract

solution to integrate

article and contract data

from and to SAP

S/4HANA to improve

transparency and

efficiency and to

standardize processes.

In addition, processes for

creating, managing and

integrating production

sites and their evaluation

can be more easily

integrated into the

purchasing process.”

Read the press release

here (in German)

https://www.aldi-nord.de/content/dam/aldi/germany/corporate/presse/pressemitteilung/20190404-ALDI-Nord-Pressemitteilung-Ariba.pdf.res/1554392317687/20190404-ALDI-Nord-Pressemitteilung-Ariba.pdf

https://www.cio.com/article/3497646/sap-things-are-happening-at-coles.html

https://youtu.be/zzx99oEZEVI

https://www.golem.de/news/anzeige-sap-ariba-oeffnet-aldi-sued-neue-wege-im-einkauf-2011-152288.html


https://my.ariba.com/GCP-WW-WBN-2021-A4D-Series-OPN_LP-01-Registration.html?campaigncode=CRM-PR21-AIP-DSSCWEBARB

3 categories: Dry foods, Wet foods & Personal Care & Drinks

Stakeholders per category: Procurement, Quality, Marketing, Logistics

4 months implementation + 3 months hypercare

Agile Methodology

22

Project Overview

Project Achievements

Harmonize processes between procurement, marketing, quality & logistics to boost productivity

Global Management tool with standard performance indicators for all teams (KPIs and

reports)

Better anticipation and management of the renewal of each private label contract for food and non-

food products (cosmetics, cleaning products…)

Most importantly, the major challenge of accelerating the time to market of

private label products (from products conception to store shelves)

Improve collaboration internally and externally (suppliers) through a single

platform from the start of the process


Use case: CAPSA foods, leading

company in the Spanish dairy

sector

“ We chose SAP Strategic Sourcing because it is a

leading platform, it covers the whole procurement

process, and it uses best practices. It is

continually being improved and has a native

integration with SAP ERP.”

Luz Prado, Purchasing Director, CAPSA Foods

• Procurement department has become more agile, reduced negotiation time, and is now getting to market early

• Replaced manual processes, meetings, and emails with an automated platform

• Rapid, three-month deployment

See CAPSA Foods video

https://www.ariba.com/resources/library/library-pages/capsa-foods


Typical results achieved by our customers

15% faster time-to-market for

new products

Engaging sourcing and

suppliers during product

development

40% reduction in sourcing

cycle times

Improving team

productivity and

streamlining processes

5% to 10% savings in direct

spend costs

Harnessing economies of

scale and reducing

contract leakage

Source: SAP Benchmarking for the 1st bullet; average of early adopter customer results for the others

PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ

Why SAP?

Best in Class Solution PortfolioModular

Out of the box integration with SAP S/4H and ERPEnd to End Business Processes

All spend categoriesDirect, indirect, services, external labor and travel

SAP BusinessNetwork – the world’s largest B2B Network190 countries - 5m supplier – every 7s

Retail Sourcing for private label and freshIntegration to SAP ERP IS-Retail, S/4H and PIM solution

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In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or

any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation,

and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platforms, directions, and

functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason

without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or

functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ

materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, and they

should not be relied upon in making purchasing decisions.

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