sap logistics and order fulfillment strategy
TRANSCRIPT
Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
Social Media
CatalogsWeb Sites
Mobile
Smart Devices
Kiosks
Retail
Customer CentricityMulti Channel Strategy requires Demand Networks
45%of enterprises are building direct-to-customer fulfillment capabilities
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Personalized SolutionsLot size of One requires Product Networks
Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
52%of manufacturing companies expect to be highly vertically integrated in the next five years
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“Help the world run better and improve people’s lives”
“To help people save money so they can live better.”
“…charting the course for a stronger, more sustainable future...”
“…dedicated to…enriching people’s lives”
“…to create a more prosperous society…”
Improve People’s LivesSpeed to fulfill individualized customer demand requires Internet of Things
Source: The Chief Supply Chain Officer Report 2014, Sep 2014, SCM World
87%of supply chain officers consider Internet of Things as important or interesting technology
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Business StrategiesTranslating Business Realities to Business Strategies
Customer CentricityTransform Supply Chain & Logistics into Demand Networks
Personalized SolutionsConnect Products, Assets & Machines to Product Networks
Improve People’s LivesGain real-time network insight to action
with Internet of Things
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Demand NetworksTransform Supply Chain & Logistics into Demand Networks
Planning MattersAggregated demand leads to short-term forecast accuracy < 70%* Business Concept: 3 Dimensional Planning
Be Responsive< 10%* of suppliers are directly connected with their customer’s supply chainBusiness Concept: Business Networks
Fulfill to PleaseAbout 10%* of world-wide GDP is related to Logistics spendingBusiness Concept: Connected Logistics PLAN – RESPOND – DELIVER
*Source: Several SAP Benchmarking Reports and Industry Analyst Reports
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SAP Solution StrategyConnect your Company Strategy with your Customer & Product Strategy
SAP HANA Platform
Product Networks
Personalized Solutions
Internet of ThingsImprove People’s Lives
Demand Networks
Customer CentricityPlan
Respond
Deliver
Design
Produce
OperateMonitor
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Demand NetworksCustomer Centricity – Demand Networks – Plan/Respond/Deliver
Sales, Inventory and Operations Planning Demand Management Demand Network
Response and Supply Management Production Planning and Scheduling Response Network
Warehouse Management Transportation Management Logistics Network
man
aged
clo
udpublic cloud
on-premise
Plan Respond Deliver
SAP HANA Platform
SAP Business Suite 4 HANA
Plan Respond Deliver
Real-time Network Insights
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Increasing market volatilityMajor shifts in customer demand volume, increasing regulations, new competitors
Escalating customer expectationsCustomer is demanding high-quality, flexible delivery becoming the #1 logistics objective
Declining logistics performanceImpact of disruptive events and technology changes while cost budgets stay the same
The role of logistics is changingGlobal business drivers impacting logistics
Complexity
Delivery Performanc
e
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Major challenges for logistics and distribution
Cost pressureLogistics cost average 10% of revenue and are still increasing, bearing optimization potentialTransparency remains vagueLogisticians require process control along with real-world based insights for rapid and effective decision makingIsolated operations at logistics partnersManufacturers, freight forwarders, carriers and retailers operate independently
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Strategies for logistics and order fulfillmentLogistics optimization Translate constraint-based manufacturing and inventory optimization to
logistics capacities Differentiate in logistics with planning and response management Evolve from goods fulfillment to e-commerce business
Real-time insights and control Connect logistics to the internet of everything for business Simplify material flow and increase warehouse efficiency Provide insights into the network for effective and responsive decisions, and
execution
Logistics connected Orchestrate strategic and medium-term planning for manufacturing
companies, freight forwarders, carriers and retail companies on one platform
Determine best mix of carriers to meet business goals Sense and respond to logistics insights
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Strategies for Warehouse Management
Introduce optimization techniques Slotting and constrained-based planning in the warehouse Warehouse layout optimization
Increase warehouse efficiency through Internet of Things Augmented reality for warehouse workers Material flow system and warehouse automation
Simplify material flow Seamless flow between Make and Deliver through production warehouse Handle returns as volume business (up to 30% in e-commerce)
Optimize warehouse and distribution operations by combining optimization techniques with the end-to-end logistics process across a warehouse
Dock Appointment Scheduling Manage the inbound and outbound flow to and from warehouse dock doors. Reduce delays and fees from carriers and increase service levels. Maintain and update appointment with carriers.
Warehouse Management Optimize processes, resources and assets in the warehouse. Manage quality, safety, automation, inventory in end-to-end process optimization combined with state-of-the art analytics.
Lower customer order cycle time
Where picking, packing, and shipping are automated
More orders shipped on time Where warehouse process is optimized based on shipping times
6%
48%
Warehouse Management
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“We deployed SAP EWM at five large sites. It has helped us raise productivity, reduce costs, improve the customer experience, and become a safer place to work. We are seeing less travel time, fewer unnecessary exits from the forklifts, shorter loading and unloading times, and a more accurate order picking process.”Venkat Paruchuri, Director of Supply Chain IT, Dr Pepper Snapple Group
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Strategies for Transportation Management
Introduce optimization techniques Optimize asset positioning through transportation resource planning Load planning and optimization
Differentiate with planning and response management Real-time strategic planning and simulation of distribution networks Synchronize capacities between shippers and service providers
Operate on one supply chain execution platform Orchestrate strategic and medium-term planning for manufacturing
companies, freight forwarders, carriers and retail companies on one platform
Provide insights into the network for effective decisions and execution
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Enable companies to better meet transportation demands with streamlined processes, decreased costs, improved compliance and flexibility
Freight Planning and Optimization Optimize and balance freight costs and constraints.
Transportation Requirements ManagementCentralize transportation requirements management, from entry to final settlement.
Freight Tendering Create an automated environment for freight tendering.
.Carrier Booking
Automate a collaborative environment for carrier booking.
Lower spend When transportation is integrated with SAP ERP and partners
Less invoice errors
With automatically calculated and distributed costs
13%
22%
Transportation Execution and MonitoringExecute and monitor transportation and planning
Freight and Forwarding SettlementManage and settle freight agreements for carriers and customers.
Transportation Management
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“ We have been quick to realize the benefits of SAP software, and our customers have responded positively. SAP Transportation Management and SAP Event Management have given us a competitive advantage in a challenging market, and we are confident they provide the ideal platform to drive future growth.”Paul Momege, IT Director, Norbert Dentressangle, Freight Forwarding Air & Sea Division© 2015 SAP SE or an SAP affiliate company. All rights reserved. 17Confidential
Cargill improving visibility with SAP Transportation Management
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Strategies for Logistics Networks
Sense and respond to logistics insights Alert stakeholders and adapt business processes Real-time reporting, analysis for insight-into-action and risk mitigation
Manage freight strategically Determine best mix of carriers to meet business goals Monitor compliance with agreements for both sell and buy side
Connect logistics to the internet of everything for business Increase utilization and goods throughput with real-time location
services Accelerate delivery times with reduced waiting times and automated
monitoring
Deliver the best-possible carrier services with
improved freight contracting, holistic partner collaboration
and transparency.
Strategic Freight Management Forecast and assess future transportation requirements. Request bids from carriers to address transportation needs, and negotiate contracts and agreements with carriers.
Sense and respond to logistics insightsProvide complete tracking of goods and assets in transit across the entire supply chain, allowing quick resolution of issues, lower operating costs, and limiting excess inventory.
Less transportation spend Where forecasts are dynamic and updated
frequently
Fewer unplanned costsThrough visibility into in-transit and network-wide inventory
20%
9%
Logistics Network
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21© 2014 SAP SE or an SAP affiliate company. All rights reserved.
“Our aim is to gradually interconnect all modes of
transport – from waterways and roads all the way to the
railway”
Hamburg Port Authority - steering course for the connected port of the future
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Balance customer service and delivery costs for greater
speed, efficiency, and sustainability
Logistics NetworkEnable cross-company coordination of logistics with strategic freight management and collaboration.
Efficient Logistics & Order Fulfillment
Warehouse Management
Transportation Management
Logistics Network
Transportation Management Run multimode, domestic, or international transportation processes in one holistic solution
Manage advanced distribution centers and production warehouses with optimization capabilities.
Warehouse Management
Efficient Logistics and Order Fulfillment
SAP HANA Platform
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Integrating and connecting logistics
Real-time insights
and controlOptimization Connected
Logistics platformWarehouse Management, Transportation Management and Track and Trace converged on one platform
Business suite integrationLogistics seamlessly integrated to financials, order-to-cash and procure-to-pay
Logistics networkOrchestration of collaboration between logistics partners, and track and trace in the internet of things
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Warehouse Management
Transportation Management
Mobile Enabled Experience
SAP HANA Platform
Track & Trace
Logistics and Order FulfillmentRoadmap
Recent innovations
Planned innovations Future direction
Warehouse Management
• Advanced production receipts/staging
• Multi-deep storage (for automation)
• Transit warehousing• Warehouse billing
• E-Commerce, B2C and retail focus
• Optimization and increased efficiency
Transportation Management
• Manual Planning with Gantt Charts
• SAP HANA Smart business
• Collaboration portal
• Focus on logistics service providers
• Transit warehousing• Transportation
resource planning
• E-Commerce, B2C and retail focus
• Accelerated Supply Chain convergence
Logistics Network
• Connected Logistics through the Internet of Things
• SAP HANA Smart Business
• Broaden footprint of Internet of Things solutions
• Supply Chain Orchestration integrating Logistics Network
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