Implementing SAP EBP 3.5

Replacing an ASP Solution

Jeff RishelIT Director

Kim WatkinsGlobal eProcurement Manager

Growth focused company producing customized blow-molded plastic containers

Approximately 3,900 employees

2002 Sales of $906.7 million

55 plants in 11 countries

Graham Packaging Company LP

Our situation in 1998

Excessive Spreadsheet Use Custom Core Application

Lack of Timely Information Cumbersome Core Applications

Data Integrity Concerns Year 2000 Issues

Lack of Technology Sharing Network Infrastructure

Limited End-User Access to Data

Linkage of Strategy to Budget

Policy and Procedure Discipline

Deployment of Best Practices

Reliance on Specific Personnel Centralization vs. Decentralization

Limited Detailed Production Information

Performance Management

Aging Hardware Platform

Why SAP?

CustomerFaster and more effective response to external customer needsProvide a competitive advantage

People / EnvironmentGreater response to internal customer needsEmployees become more valuable as they gain a greater understanding of ourbusiness through effective access to reliable information Less time reporting results and more time analyzing information to drive performance

Management Operate in a best practice environmentGreater flexibility in accessing and formatting information

GrowthAccommodate acquisitions efficientlyAccommodate organic growth with new plants and products produced globally

SAP R/3 Implementation

• Very Successful implementation– 10 months to build, test, and train– Rolled out to 31 plants in US and Canada all in 1 weekend in April

1999!– Not just one module but 8 (AM, HRPAY, PS, FI, MM, PP, SD, COPA)

• Implementations continue– 8 Countries (US, Canada, Mexico, France, Spain, Belgium, Brazil,

Argentina)– 51 Plants– 10 Modules (AM, HRPAY, PS, FI, MM, PP, SD, COPA, QM, AR)

• ONE Global Instance

SAP R/3 4.6B

Dell Servers running Windows NT 4.0

EMC SAN, approximately 500gig

DEV, QAS, PRD, EBP systems

SAP R/3 Landscape

Decentralized Procurement function

Hand written requisitions

PO Approval, Receipt, Invoice on same day

30 plants / 30 suppliers

Same supplier providing different discounts

No record of spend by material

Procurement before the e

Questions

Why do we have all these vendors?

Can’t we use an automated system?

How many checks under $1,000 do we cut?

Can’t the IT department help?

Why do we manually do requisitions?

Why aren’t we getting better discounts?

What is SAP doing for us?

A New VP of Global Sourcing

Procurement without the e

Decentralized to centralized purchasing

Limited spend data – surveys and countlesshours of research

Outsourcing to procurement firms

Consolidation and reduction of vendors

Consistent pricing/discounts at all plants

Hard dollar savings - $6 million in 2 years

Adding the e to Procurement

Implemented with an ASP provider in February 2001.

• No capital cost

• Low monthly fee vs high software costs

• Quick implementation

• Limited use of internal resources

• Gain process and compliance experience

Implementing an ASP

Implementation Process - 6 Weeks

Reviewed “as is” and created “to be”

processes

Handling of direct vs indirect materials

Data files from SAP

Integration – POs, POAs and ASNs using

IDOCs, conversion tables, eAdapter

Scenario testing

User training

Implementing an ASP

Problems

Multiple purchasing organization structures

Handling of account assignment data

Insufficient test environment

Limited control - sharing system with otherclients

Automate the payment process

Payment via Evaluated Receipt Settlement (ERS)

Firm and accurate catalog prices

Data provided by supplier on the ASN

POA and ASN is required before postingreceipt in SAP

Payment references invoice number

Why switch from ASP to SAP

ASP financial problems

ASP system problems

Language capabilities

Currency capabilities

Closer integration with SAP

Lower cost

Internal control

Implementing 3.5

Implementation Process - 6 Months

Hardware/Software SetupIntegration

• BugsEye with EBP• EBP with R/3

Loading of CatalogsSupplier Order & Response Center (ORC) SiteScenario Testing – EBP & ORCDocumentation – User & SupplierUser TrainingSupplier Training

Implementing 3.5

Challenges

Organization Structure

4-Level Approval

Override Product Category and GL Account

E-Mail Alerts

Interfacing with Vendors

Catalog Setup

Monitoring and approving catalog changes• eMerge• Access

Special request orders

PO, POA, COA and ASN process Order & Response Center site

Documentation and training

Order & Response CenterSupplier is a user of our SAP system.

Order & Response CenterCan view PO history in addition to sending POAs and ASNs. Also has access to SAP reports.

Order & Response CenterCan select multiple POs to POA or ASN without jumping back and forth between screens.

Order & Response CenterPOA and ASN screens look similar for easy use.

Graham Procurement after e

93 suppliers on-line

$310 million of spend on-line

87% of on-line spend paid via ERS

Substantial reduction in maverick spending

One shopping cart, one approval, multiple POs

No more paper requisitions

Complete and accurate spend data

Questions

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Session Code: 4401