OpenSAP Escm1 All Units Presentation

Unit 1: How Digital Transformation Is
Impacting the Extended Supply Chain
How Digital Transformation Is Impacting the Extended Supply Chain

Covered in this unit
The digital economy
Digital transformation in the
extended supply chain
Customer centricity
Individualized products
Sharing economy
Resource scarcity
2015 SAP SE or an SAP affiliate company. All rights reserved.
Public

Examples of digital disruption
UBER
Digital disruption
is happening
One of the largest taxi companies

owns no taxis
airbnb
One of the largest accommodation providers

owns no real estate
skype
One of the largest phone companies

owns no infrastructure
Alibaba
One of the most valuable retailers

owns no inventory
NETFLIX
One of the largest movie houses

owns no cinemas
iTunes
One of the largest music companies

owns no music
Amazon
One of the biggest book distributors

owns no books
Public

Digital transformation in the extended supply chain
People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Individualized Products
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public

People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public

People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public

People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public

People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Sustainability
Business Network
Business
Networks
Design
Respond
Product Safety
& Stewardship
Asset
Intelligence
Network
Integrated
Business Planning
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public

What you learned in this unit
Key Takeaways
The digital economy is already here
Your extended supply chain can be a competitive
differentiator in digital transformation
Public
Thank you
Contact information:
open@sap.com

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Public
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Unit 2: Customer Centricity
Customer Centricity
Business Challenges of a digitized
supply chain
Where does customer centricity fit into
digital transformation?
Defining customer centricity

Demand sensing
Omni-channel sales
Omni-channel fulfillment
Public
Customer Centricity
Transformation in the extended supply chain
People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public
Customer Centricity
Global trends driving customer centricity (2)
Rising middle class in
emerging markets
Web Sites
Millennials and
Generation Z
Catalogs
Social Media
Mobile
Retail
Smart Devices
Kiosks
Proliferation and convergence of channels

The first decade of this century witnessed a historic

reduction in global poverty and a near doubling of
the middle class, but 71% of the global population
still subsists on less than $10 a day, and 1 billion
people live on less than $2 a day.
Source:
Pew Research Center, A Global Middle Class Is More Promise than Reality
Public
Customer Centricity
emerging markets
Web Sites
Millennials and
Generation Z
Catalogs
Social Media
Mobile
Retail
Smart Devices
Kiosks

Generation Z is mobile first and mobile

only, and they are nothing like Millennials
Source: Brian Solis, 25 Disruptive Technology Trends 2015 - 2016
Public
Customer Centricity
emerging markets
Web Sites
Millennials and
Generation Z
Catalogs
Social Media
Mobile
Retail
Smart Devices
Kiosks

A large majority of U.S. consumers are multichannel

shopping, with 69% webrooming (browse products
online and buy in-store), and 49% showrooming
(browse products in-store and buy online).
Source: Harris Interactive, Showrooming and Webrooming in the 2014
Holiday Shopping Season
Public
Customer Centricity
A key enabler of a digitized supply chain
Omni-Channel Sales
Demand Sensing
45%
of enterprises are building
direct-to-customer fulfillment
capabilities
Source:
SCM Worlds 2014 Chief Supply Chain Officer survey
Omni-Channel Fulfillment
Public
Customer Centricity
Demonstration
Public
Customer Centricity
Key Takeaways
Customer centricity is changing the way we
do business
Business processes today are market-driven

Omni-channel enablement is key from a
sales and fulfillment perspective
Public
Customer Centricity
SAPs strategy and vision
Provide a digital foundation for becoming customer-centric and demand-driven
Engage with consumers,
collaborate with business partners
Leverage demand network analytics:
descriptive, prescriptive, predictive
Integrate to downstream applications

to facilitate profitable demand response
Business Suite
S/4 HANA
Demand Source of Truth

High performance repository of harmonized
structured & unstructured
downstream demand & demand-influencing data
Retailer
POS
Distributor/
Market
wholesaler data research data
Social media
data
Demand-influencing
data e.g. weather, Geo data
events, demographics,
Sensor data
(IoT)
Public
10
Thank you
open@sap.com

Public
12
Unit 3: Individualized Products
The role of individualized products in
digital transformation
Defining individualized products
Platform
Configuration
Personalization
Industry 4.0
Lot size of one
Digitalized inventory
Demonstration
Public
People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public
Global trends driving individualization of products
DIGITALIZATION
SOLUTION
INDIVIDUALIZATION
SPEED OF
INNOVATION
SMARTER
PRODUCTS
Market of One
Multi-faceted configuration and
highly variable demand with regional
and localized requirements.
Increase variants and reduce costs
Differentiation
Move first by highly flexible,
open and dynamic innovation
processes. Insight-driven
decision making
Mechatronic
Design and produce cross-domain
components as one solution
(design, electronics, software,).
Analyze Big Data in context
Public
Changing the way we design, make, and deliver
80%
of companies said that digital
operations are critical to
every organizations
manufacturing
competitiveness
Source: Digital Manufacturing & Design Innovation Institute
Industry 4.0
Configured Products
Lot Size of 1
Platform
Digitized Inventory
Personalized
Public
Demo
Industry 4.0
Demonstration
Configured Products
Lot Size of 1
Platform
Digitized Inventory
Personalized
Public
Key Takeaways
The demand for individualized products is growing
This is changing the way we design, make, and deliver
to our customers
Designing for personalization means building a product
platform
Manufacturing has to be geared for the lot size of one
Products need to be smarter to take advantage of IoT
Public
Thank you
open@sap.com

Public
Unit 4: Resource Scarcity
Resource Scarcity
Defining resource scarcity
Talent acquisition
Environmental & social responsibility
Risk management
How resource scarcity effects digital
transformation
Public
Resource Scarcity
People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public
Resource Scarcity
Business challenges
Insufficient resource visibility

High network dependencies
Increasing compliance and regulatory requirements
64%
of companies say that priority
access to scarce raw
materials/capacity and
collaborative cost reduction
with suppliers are extremely
relevant to their competitive
advantage
Source: SCM Worlds 2014 Chief Supply Chain Officer survey
Risk Management
Environmental &
Social Responsibility
Talent Acquisition
Aging workforce
Challenge of attracting workers
Skill requirements increase with
complexity
Contingent labor
Limited supply of raw materials

Increasing societal expectations in
the digital age
Sustainability reporting and
accountability
Public
Resource Scarcity
Business strategies
Drive product stewardship across the supply base

Ensure ethical sourcing and enable product traceability
Leverage IoT for predictive risk management
64%
of companies say that priority
access to scarce raw
materials/capacity and
collaborative cost reduction
with suppliers are extremely
relevant to their competitive
advantage
Source: SCM Worlds 2014 Chief Supply Chain Officer survey
Risk Management
Environmental &
Talent Acquisition
People strategy aligned with supply

chain strategy
Identify gaps and address long-term
through training
Reduce learning efforts to adapt to
high workforce turnover
Ensure product marketability and

supply chain continuity
Reduce cost of compliance
through automated processes
Collaboration for ecological and
social performance
Public
Resource Scarcity
Demonstration
Demo
Risk Management
Talent Acquisition
Environmental &
Public
Resource Scarcity
Key Takeaways
The challenge of labor and natural resource
shortages is foremost in mind
The digital economy will change the way companies
manage talent, the environment, and risk across the
supply chain
As part of the digital transformation, build
sustainability and compliance into your business
processes
The new workforce is ready for the new work, but they
have high expectations of corporate social
responsibility they want work that matters!
Public
Thank you
open@sap.com

Public
Unit 5: Sharing Economy
Sharing Economy
The role of business networks in
digital transformation
The types of networks that make up
the sharing economy
Response networks
Logistics networks
Asset networks
Product networks
Public
Sharing Economy
Digital transformation in the extended supply chain (1/2)
People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
End-to-End
Visibility
Respond
Sustainability
Customer Centricity
Industry 4.0
Omni-Channel
Products &
Assets
Customers &
Markets
Public
Sharing Economy
Digital transformation in the extended supply chain (2/2)
50%
of networked companies are more
likely than their peers to have
increased sales, higher profit
margins, and be market leaders
Logistics
Manufacturing
Project
Network
Assets
Product
Compliance
Strategic
Sourcing
Asset
Network
Source: McKinsey
Response
Network
Logistics
Network
Manufacturing
Network
Public
Sharing Economy
Response networks
SAP Supply Chain Control Tower combines
network, planning, and execution inputs into a
single view
Key Features:
End-to-end visibility
Smart alerts and analytics

What-if simulation capabilities
Case management to drive collaborative action
to resolve issues
Public
Sharing Economy
Logistics networks
Key Features
Capture and monitor geolocation of
transportation units
Geofences for automatic notifications
Role-based access and functionalities
Communication with direct and indirect
business partners
waiting times,
emissions, and
environmental
impact
Hub
Operator
Parking
Space
Operator
Logistics
Service
Provider
Terminal
Operator
Driver
Telematics Data Map Visualization Traffic Information Hub Sensor Data

e.g. by T-Systems
infrastructure
utilization, efficiency,
and goods
throughput
Public
Sharing Economy
Product networks
Supplier
Product Stewardship
Network
Raw Material
Supply Chain
Semi-Conductor
Contract
Manufacturer
Customer
Retail
Distributor
OEM
Component
Manufacturer
Business Network
Product Compliance
Conflict Minerals
Sustainability Assessment
Regulatory Content
Industry Content
Community
Public
Sharing Economy
Asset networks
Remotely sense operational data from
equipment
Sense
Monitor
Analyze
Predict
Act
Analyze and monitor equipment data

and correlate with business information
to predict future malfunctions
Optimize maintenance and service

operations and enable new business
models around the equipment
Organizations adopting a preventive and predictive maintenance and service approach as compared to organizations
practicing reactive maintenance and service
- 44%
Lower unplanned
downtime
-17%
Lower annual service and

maintenance costs
+28%
Higher return
on assets
Typical results*
* SAP performance benchmarking

Public
Sharing Economy
Key Takeaways
A company is only as strong as its network of
partners
Today we can collaborate with:

People (customers, suppliers, logistics service
providers)
Things (machines, assets, equipment)
We can collaborate for many reasons
Public
Thank you
open@sap.com

Public
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Unit 6: Digital Core of the

Extended Supply Chain
Digital Core of the Extended Supply Chain

Business challenges
Why do we need a digital core?
What is the digital core for the extended

supply chain?
Public

People &
Resources
Suppliers &
Logistics
Resource Scarcity
Sharing Economy
Business Network
Design
The
Digital
Core
Respond
Sustainability
Customer Centricity
Omni-Channel
Industry 4.0
Products &
Assets
Customers &
Markets
Public

Living in a digital economy
Last two years
Last two years
90%
40%
of the worlds data has

been generated1
growth in adoption of
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.

2 Technology Adoption Report on Business
Networks, Ardent Partners, 2014.
3 Internet of Things (IoT) 2013 to 2020 Market Forecast:

Billions of Things, Trillions of Dollars, IDC, 2013.
4 Statista, 2014.
5 Cisco Global Cloud Index: Forecast and

Methodology for 20132018, Cisco
Systems Inc., November 11, 2014.
Public

Business leaders need to digitally transform
Core Business Processes
Move away from lengthy and timeconsuming batch processes
Resource Scarcity
Sustainability
Sharing Economy
Business Network
Design
Connect my enterprise to people,

devices, business, and social
networks
Industry 4.0
How can I digitize my core?
Suppliers &
Logistics
Products &
Assets
The
Digital
Core
Respond
React quickly to market signals

happening in real time across the
value chain
People &
Resources
Customers &
Markets
Customer Centricity
Omni-Channel
Public

But often complexity is standing in the way
Scattered information
Batch orientation
Complex system landscape
Outdated decision making
Complex technology
Many applications & disparate

software for different processes,
creating different versions of truth,
duplicated and scattered
information
Batch processes preventing

relevant decision making based
on real-time, latest information
Systems designed to store

transactional data in one system
and analytical data in another.
Although integrated, there is
inherent data latency, which
prevents immediate access to
key data
Technology limitation
Public

Simplify the increased complexity
Decision making
Business processes
Technology
SAP Fiori on any device
Business Network
Cloud
Design
Extended
supply chain
Plan
Operate
Respond
Deliver
Produce
SAP S/4HANA
On-premise
Connectors
Internet of Things
Public

SAP S/4HANA A new business suite for new business outcomes
Decision making
Live business insight

Role-based experience
All devices
Immediate business impact
Business processes
Real-time processes
Digitally connected enterprise
Best business practices
New profit models
Technology
Simplified data model

Choice of deployment
Open innovation platform
Much lower TCO
Public

SAP S/4HANA Enterprise Management digitized core business processes
Key Capabilities
Real-time, mission-critical business processes
across your entire enterprise, from order to
cash to procure to pay, to plan to product, as
well as core functionality for finance and HR
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
Public

Highlights of key business innovations in SAP S/4HANA
Re-architecting for
in-memory platform
Material Requirements
Planning
Inventory
Management
Material
Valuation
Sales Representative
(Order Management & Billing)
Procurement Clerk
(Procurement)
Material Planner
(Material Requirements Planning)
Available-to-Promise &
Backorder Processing
Capacity
Planning
Industry Solutions
to Core
Responsive user
experience design
Unifying functionality
in core
Public
10

Innovations with SAP S/4HANA: Material Requirements Planning Cockpit
Public
11

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

Utilize columnar data layout
MKPF/
MSTQ create
MSTE
MSTB
MCHB
MSTQHfly
MSTEH
MSTBH
MCHBH
Simply
aggregate
views
on the
when
needed
MSEG
Remove overhead of updating and locking and processing

MSKU
MSKA tables
MKOL
MSPR
MSKUH MSKAH MKOLH MSPRH
unnecessary
Target architecture
Material
master
MSSQ
MSSA
MSLB
MSSQH
MSSAH
Eliminate redundancies and aggregates

Have a simple and high-performant
MSLBH
reporting, both for quantities and values

MARC
MARD
Transactional
data
MARCH MARDH
26
aggregate
tables
Reduce memory footprint

Performance:
Ensure transactional context
Master
data
Public
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Business process view: Real-time visibility
Enable constant control of cost, risk, and performance of assets
Traditional system
Offline tools and separate systems
RCM/
FMEA
With SAP S/4HANA

Asset criticality
analysis
Asset strategy
management
Predictive
maintenance
and service
SAP Business Warehouse business planning and simulation
SAP ERP
Reporting
and analytics
Planning
Maintenance
plans
Activity-based
costing
Maintenance
task lists
Asset
intelligence
network*
SAP S/4HANA
Proactive maintenance strategy
planning*
Maintenance
execution
Planning
Risk and reliability

analysis*
Risk-based asset lifecycle costing*

* Planned
Traditional
With SAP S/4HANA
Process excellence
Public
13

Business process view: Real-time EHS risk awareness and insight
Traditional system
Business
Intelligence
With SAP S/4HANA

Reporting
and analytics
Management of Change
Planning
Environmental
Compliance
Environmental
compliance
Management of
Change
Management of change
Management of change
SAP S/4HANA
Reporting and analytics
ERP Component Extension Environmental Health and Safety Management

Incident
Risk
Environment
management
management
assessment
ERP
Industrial hygiene
and safety
Hazardous
substance mgmt
Occupational
health
Incident
management
Waste
management
Traditional
Planning and simulation
Risk assessment
(industrial hygiene and
safety, occupational
health, and hazardous
substance management
embedded)
Environment
management
With SAP S/4HANA
Process excellence
Public
14

Business process view: Product Lifecycle Management
Make better design decisions in new product development with real-time analytics
Traditional system
With SAP S/4HANA

Team Data Management
Sales
Engineering
Product Lifecycle Management
Compliance/
Other
Real-Time Product Insight

Manufacturing
Connected Product Workflows
Service
Common Product Model

Quality
Traditional
With SAP S/4HANA
Product Opinion
Data Domain Border
Tailored
Tool
Product Development
Performance
Public
15

Key Takeaways
Complexity has increased across the extended supply
chain
Leveraging SAP S/4HANA as the digital core enables
Real-time business insights

Real-time processes
Simplified data model
Public
16
Thank you
open@sap.com

Public
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Unit 1: How Digital Transformation Is

Impacting the Extended Supply Chain

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

One of the largest taxi companies

One of the largest accommodation providers

One of the largest phone companies

One of the most valuable retailers

One of the largest movie houses

One of the largest music companies

One of the biggest book distributors

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

How Digital Transformation Is Impacting the Extended Supply Chain

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Unit 2: Customer Centricity

Defining customer centricity

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Proliferation and convergence of channels

The first decade of this century witnessed a historic

Proliferation and convergence of channels

Generation Z is mobile first and mobile

Proliferation and convergence of channels

A large majority of U.S. consumers are multichannel

2015 SAP SE or an SAP affiliate company. All rights reserved.

Business processes today are market-driven

2015 SAP SE or an SAP affiliate company. All rights reserved.

Integrate to downstream applications

Demand Source of Truth

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Unit 3: Individualized Products

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Products need to be smarter to take advantage of IoT

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Unit 4: Resource Scarcity

2015 SAP SE or an SAP affiliate company. All rights reserved.

2015 SAP SE or an SAP affiliate company. All rights reserved.

Insufficient resource visibility

2015 SAP SE or an SAP affiliate company. All rights reserved.

Limited supply of raw materials

Drive product stewardship across the supply base

2015 SAP SE or an SAP affiliate company. All rights reserved.

People strategy aligned with supply