Specific Industry Information

Wholesale Distribution Industry

The battlefield is ready, and the fight has begun for Wholesale Distribution companies. SAP for Wholesale Distribution is a fully integrated portfolio of solutions designed to address the business requirements of wholesale distribution and trading organizations of all sizes and segments. These solutions enable customers to deliver world-class services to their ecosystem and to better master the challenges of managing a high volume, low margi n business that is constantly responding to regulatory pressure, competitive pressure and market consolidation. SAP for Wholesale Distribution is ideally suited to businesses that act as intermediaries who buy and sell products in high volumes, deliver value-added services and interact with a high number of business partners. SAP for Wholesale Distribution supports customers to improve operational excellence and profitability and at the same time to introduce innovative business models. Our customers benef it from SAPs financial strength and stability and their large ongoing research and development investment, a level unmatched by any other vendor. Additionally, more than 1.000 wholesale distributors have chosen SAP, making us the leading partner in this industry. With an established customer base and over 10 years experience with companies such as Metro, Coca Cola, McKesson, Graybar and Techdata this is fast growing sector with rapid penetration of large and mid-sized companies globally. Key Business Drivers Revenue growth wholesale distributors need to increase revenues by improving their pricing (appropriate price increases) and by reducing the days sales outstanding. Tighter and extended collaboration with partners further enhances sales growth by accelerating inventory turns and by improving goods availability. Cost of goods reduction wholesale distributors need to take advantage of order optimization opportunities, thereby improving profitability and visibility in order to strengthen negotiation capabilities. In addition, efficiently managing chargeback and rebates outstanding processes will have a positive impact on the overall profitability. Operating expenses reduction wholesale distributors need to improve accounting and controlling process efficiencies as well as increase their business intelligence and transparency. They must reduce labor/payroll and increase personnel productivity, and improve their materials management in order to reduce inventory. Differentiation from competition - wholesale distributors need to change their / introduce new business models in order to gain a competitive edge, thereby enabling growth, profitability and customer satisfaction/retention, and supporting the longer-term survival of the organization (i.e. new (chargeable) services, entering into new markets/geographies or product proliferation.

Key Business Benefits Enhanced Cost Recovery the Chargeback Process for wholesale distributors handles reimbursements regarding special conditions that a manufacturer has with his customers and comprises the data capture, subsequent invoicing and control of Chargeback agreements. In addition the management and tracking of bonuses enables full utilization of financial agreements with suppliers. Reduced cost of goods tighter supplier management is enabled by SAPs collaboration capabilities including an integrated vendor scorecard, reporting and vendor portal solution. Optimized Logistics processes with SAPs Load Building, orders can be bundled ensuring an optimized and cost-effective delivery. The new function Inventory Optimization facilitates the best possible utilization of storage capacity, warehouse management significantly improves efficiency. Reduced Financial and Transactional Costs With SAPs Agency Business wholesalers can offer their business partners Financial Services such as Centralized Regulation, Centralized Invoicing or Factoring. Together with an extended Bonus settlement capability and web-based complaint administration for agency receipts, financial and transactional costs can be reduced considerably. Extending customer reach the solutions helps to increase customer retention / satisfaction levels by offering comprehensive customer services including professional internet sales, Direct Store Delivery and customer self-services Improved profitability with new Value Services SAP for Wholesale Distribution offers some of the most important Marketing and Sales services for wholesale distribution, facilitating call centers, a customer information database or additional services such as repackaging according to customer specification. SAPs solution offers innovative services such as sales direct from trucks, Direct Store Delivery, and SMI (Supplier Managed Inventory). Increased Insight ensures Better Decisions the allocation of costs with the Vendor Billing Document from

SAP improves cost transparency and allows for a more accurate profitability evaluation. Real-time profitability analyses of diverse business processes enable sound business decisions. Reduced labor costs SAPs Human Capital Management and Workforce Management Solutions provide centralized control of warehouse / branch personnel to reduce labor costs and improve productivity. Enables business simplification and common standards and operating processes across divisions and companies SAP for Wholesale Distribution uses one integrated database to ensure one version of the truth and the company wide adoption of standard best practices. Lower total cost of ownership SAP for Wholesale Distribution integrated solutions reduce total cost of ownership by providing best-of-breed business process support out of the box and adhering to IT industry standards, such as XML. It eliminates the need for costly interfaces required by point solutions. Upgrade costs are significantly reduced due to the technical design of the solution enabling many retailers to take advantage of new functionality releases at least cost. Sarbanes Oxley compliance SAPs financial solution is the market leade r worldwide. It ensures that wholesalers, distributors and traders, including those that have made a number of acquisitions or who operate in different countries and across different channels, will be able to integrate their financials seamlessly. For American companies, it ensures compliance with Sarbanes Oxley legislation.

To unleash the full power of ERP 2004, SAP Best Practices for Wholesale Distribution has been developed, helping you reap business benefits quickly and reduce your risks as far as possible. New Wholesale Distribution Key Scenarios include: Procure to Pay Procurement with Loadbuild Order to Cash Extended Sales Order Processing with Sales support and Dynamic Product Proposal Financial Supply Chain Management which includes Bill Presentment and Payment (Biller Direct), Credit Management, Dispute Management, Collections Management and Cash Management (In house Cash) EDI Transactions including Sales Order Inbound, Billing document Outbound, ASN Outbound, ASN Inbound Warehouse Management which includes Yard Management, Opportunistic Cross Docking, Opportunistic Cross Docking with Handling Units, and Planned Cross Docking with Handling Units.

SAP Best Practices for Wholesale Distribution can be adjusted to meet your exact requirements. SAP Best Practices is the optimal starting point, because it provides complete, pre-defined business scenarios. However, please note that SAP Best Practices for Wholesale Distribution focuses on a limited number of signature scenarios for the wholesale distribution industry. SAP Best Practices' main focus is to make all configuration settings for these business scenarios readily available for evaluation and implementation. Of course, the solution based on SAP Best Practices can be extended with additional configuration, enabling the user to fully exploit all benefits that SAP ERP 2004 and the cross-industry solutions offer.