Delivering Real-Time Business Value for Wholesale Distribution

Delivering Real-Time Business Value
for Wholesale Distribution
SAP Business Suite powered by SAP HANA
July 2013 Public

2© 2013 SAP AG or an SAP affiliate company. All rights reserved.
New competitors are entering the wholesale
distribution market and driving existing distributors
to find new ways to serve their customers
 Increase the number of sales channels offered to customers
 Optimize the number of products, services, and geographies
 Route customers carefully to the most profitable cost-to-
serve models
The real-time opportunity

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 3Public
Becoming an innovation-driven enterprise
Align business operations with customer needs
Unlock new
growth
opportunities
before your
competitors do
• Predict trends and evolving customer needs
• Enable complete insight into customer information
• Deliver superior customer service across different
channels
• Identify profit-drivers and profit-destroyers and initiate
action to increase profitability
Drive your
business at the
speed of the
market
• Enable insight -driven business decisions with
real-time insight
• Deliver fast simulation and impact analysis
• Utilize real-time, adaptive forecast and replenishment
processes
• Simplify your IT landscape
Empower people
to decide and act
in the business
moment
• Support agile decision making with real-time insight
• Deliver one version of the truth to enable true insight to
action

SAP Business Suite powered by SAP HANA
The next-generation business platform
Real-time business
In-memory
Business
transactions
Digital
connections
Collaborative
business
CloudSocial
Big DataMobile
One platform bringing it all together
Advanced
analytics

Industry value map for wholesale distribution
Fuel profitable growth for wholesale distributors
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Portfolio and Project
Management
IT Service
Management
IT Strategy and
Governance
Profitability Optimization
Customer Stratification and
Cost to Serve
Spend Analysis
Cost Recovery and Rebates
Opportunity to Cash
Marketing Planning and
Resource Management
Contracts, Orders, and
Receivables
Web Channel
Customer Service and Support
Procure to Pay
Supplier Discovery and
Lifecycle Management
Procurement and Order
Collaboration
Collaborative Invoice to Pay
Supply Chain Planning
and Execution
Demand Management
Transportation Management
Warehouse Management
People and
Talent
Core Human
Resources and Payroll
Talent Management
Time and Attendance
Management
Finance and
Trading
Financial Performance
Management
Accounting and
Financial Close
Treasury and Financial
Risk Management
General Trading
Enterprise Risk and
Compliance
Management
Supply Chain Analytics
Technology
Solutions
Analytics Consumer ExperienceData Management Enterprise Mobility
SAP HANA Platform
Application
Development and
Integration

Industry value map for wholesale distribution
Real-time value for key end-to-end processes
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Portfolio and Project
Management
IT Service
Management
IT Strategy and
Governance
Profitability Optimization
Customer Stratification
and Cost to Serve
Spend Analysis
Cost Recovery and Rebates
Opportunity to Cash
Marketing Planning and
Resource Management
Contracts, Orders, and
Receivables
Web Channel
Customer Service and Support
Procure to Pay
Supplier Discovery and
Lifecycle Management
Procurement and Order
Collaboration
Collaborative Invoice to Pay
Supply Chain Planning
and Execution
Demand Management
Transportation Management
Warehouse Management
People and
Talent
Core Human
Resources and Payroll
Talent Management
Time and Attendance
Management
Finance and
Trading
Financial Performance
Management
Accounting and
Financial Close
Treasury and Financial
Risk Management
General Trading
Enterprise Risk and
Compliance
Management
Supply Chain Analytics
Technology
Solutions
Analytics Consumer ExperienceData Management Enterprise Mobility
SAP HANA Platform
Application
Development and
Integration
Highest value for
wholesale distribution
1
4
5
2
3

Today
With SAP Business Suite
on SAP HANA
KPI improvements are high-level estimates and must be validated for each customer situation
Contracts, orders, and receivables
Business value for line of business (LoB) Sales
 Missed market opportunities due to a
lack of visibility and inefficient
processes
 Data explosion, driven by a new level
of connectivity for consumers through
mobile devices and social networks
 Data in disparate data sources, which
prevents a true 360-degree view of
the customer
 Agile marketing to respond faster to
changing market dynamics and
opportunities
 New analytical, data-mining functions
for Big Data (social media and
predictive)
 Near-real-time monitoring and
reporting on marketing performance
 One central place for collecting all
customer data, leading to a 360-
degree view of customers in real
time
 Precision marketing to personalize
every interaction with the customer
Improve
profitability by
0.5%
Optimize
Increase
return on marketing
investments by
15%
customer
satisfaction by
40%

Today
on SAP HANA
Customer stratification and cost to serve
Business value for profitability and cost analysis
 Data latencies and processes delays
affect the ability to react to issues
and opportunities
 Lack of data depth and user self-
service affect internal decision-
making
 Long-running processes
 Time-intensive data queries
 Mostly manual data analysis
 Substantial amount of effort (time
spent) not directly adding to value
 Suboptimal resource efficiency and
effectiveness
 Timely execution of critical business
processes supports decision making
and increases the ability to act swiftly
(insight-to-action) in dynamic market
environments
 Ability of critical transactions and
calculations to run quickly
 Instant response times on queries
 Prebuilt analytics to automate the
data-analysis process
 Leaner processes from data capture
through data analysis
 Increased productivity through
process-optimized analytics and
mobile support
Improve
Reduce
Minimize
service level
performance
cycle times and
manual effort
Operating costs

Today
on SAP HANA
Financial performance management
Business value for planning, budgeting, and forecasting
 Planning performance limited to
OLAP; staged cubes for transactional
and master data
 Data-load performance driven by the
amount of data extracted from SAP
Business Suite
 Reporting, loading, and retraction
performance limits planning iterations
 Drill-down within OLAP cube, and
drill-through to OLTP data and data in
SAP Business Suite within standard
times
 Seamless replication of master and
transactional data from SAP
Business Suite
 Availability of more granular data to
support planning
 Negation of Big Data challenge; for
faster extract and activation times for
days sales outstanding (DSO)
 Iterative planning and real-time
simulation supported through
improved performance
 Improved performance for drill-down
(expand) and consolidation (collapse)
 Fast drill-through and live view of
transactional data in SAP Business
Suite
Improve
service level
performance
Reduce
Minimize
cycle times and
manual effort
Operating costs

Today
on SAP HANA
Demand management
Business value for material requirements planning
 Decisions often based on periodic
material requirement planning (MRP)
runs and outdated information
 Process done in batch
 Inability to replan quickly if conditions
change due to long run times
Prediction of inventory coverage for
critical items is difficult
 Inability to replan if conditions change
during the planning horizon due to
long run times
 Faster replanning, allowing more
frequent MRP runs in shorter cycles
 Instant reaction to demand changes
and updates to the supplier
 Demand information is propagated
faster through the supply chain
More frequent MRP runs:
 Reduced inventory and safety-stock
levels
 Faster information flow toward
suppliers, enabling them to react
faster to changed planning conditions
 Better synchronized material demand
and supply planning with reduced
bullwhip effect
Reduce
out of stocks by
36%
Decrease
Limit
inventory and
safety stocks by
29%
bullwhip effect

Today
on SAP HANA
Demand management
Business value for demand-driven supply chain
 Access to and effective use of timely
demand information from the supply
network becoming more and more
difficult
 Decisions often based on incomplete,
inaccurate, and often outdated
information
 Challenge of administering today’s
hardware and system landscapes
 Increased business and expert user
productivity with faster planning
processes and improved user
experience and by driving rapid
consensus across the supply chain
network
 Near-real-time reporting with
increased speed of information
analysis, leading to better supply
chain visibility and decision
making
 Improved production and cost
efficiency by simplified system setup
and administration and by providing a
more robust planning foundation
Reduce
planning cycle
times
36%
Increase
Reduce
Supply chain
performance
18%
total cost of
ownership (TCO)
24%

Today
on SAP HANA
Supply chain analytics
Business value for supply chain monitoring
 Lack of near-real-time information
 Batch jobs to extract data from
planning system to central reporting –
typically on a weekly basis
 No ad hoc operational reporting
 Need for creation of reporting, queries,
and dashboards by individual
customers
 Inability to run subdaily planning
jobs and analyze the results because of
the long data-preparation times in
SAP NetWeaver BW
 Lack of fast responses to ad hoc
queries from customer might
result in lost sales.
 Decision support based on near-real-
time information
 Ability to update information through
delta capabilities
 Standard analytical reporting
scenarios provided with streamlined
data load
 Planned ability for customers to add
their own key performance indicators
(KPI) and dashboards
 Use of advanced data-retrieval and
computing capabilities of SAP HANA
Platform optimize reporting on
supply-chain planning data
Reduce
time spent compiling,
generating, and
waiting for reports
Increase
Optimize
visibility into key
supply chain data in
an easily consumable
manner
analysis capabilities
with multiple levels of
aggregation and drill-
down techniques

Next step
Business-scenario recommendation and value discovery workshop
 SAP offers a proven methodology and approach to
discover customer-specific areas for business
improvement and quantify value potential
 We suggest such a workshop with your
LoB and IT experts
 We recommend a performance and usage analysis
of your current system as a starting point

© 2013 SAP AG or an SAP affiliate company. All rights reserved.
Thank you

© 2013 SAP AG or an SAP affiliate company. All rights reserved.
Appendix
Detailed customer cases

Reference wholesale distribution customer
Summary of validated scenarios (combined findings)
Feasibility
Businessvalue
Legend
MediumHigh
Medium High
Corporate
performance mgmt.
commodities
forecast
SAP Business
Suite on SAP
HANA
SAP HANA:
Applications
SAP HANA
Platform
Profitability and
pricing analysis
(US$23 million
annual value)
Supply chain
optimization
analytics
($19 million once)
Real-time analytics
(call center)
Real-time supply
chain (machine to
machine (M2M))
National dashboard
(enterprise
performance
management (EPM)
and mobility)
1 Short Term
FIN: Profitability Pricing Analysis
Increase buy-side profit through detailed
analysis and supplier evaluation. Improve
supplier negotiation to increase margins.
SCM: Supply Chain Optimization Analytics
Enable fact-based decisions on a single holistic
platform to optimize the supply chain and
support initiatives to reduce working capital
EPM: National Dashboard
About 25,000–30,000 orders per day and large
data volumes. National dashboard consolidation
of data from several systems, delivered today in
a static format. Mobility and a highly interactive
real-time version are needed for executive
management.
2 Medium Term
EPM: Corporate Performance Management
Improved market forecast for commodities to
assess risk exposure
CRM: Real-Time Analytics
Loyalty management; voice and text mining
SCM: Real-Time Supply Chain through M2M
connectivity
Optimize logistics
SAP HANA Platform: customer-specific
SAP HANA products: SAP NetWeaver BW on SAP HANA,
high-performance applications (HPAs), apps powered by
SAP HANA
SAP Business Suite on SAP HANA
SAP HANA
use case
Phase – deployment road map
SAP HANA use cases mapped to
industry value map end-to-end solutions

Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation
sessions and may be incompletely validated
A leading distributor of fine wines and spirits – Real-time offer
management
Wholesale distribution
Business Context and Goals
 Enable a sales rep to add value to client through sales insights based on heat maps and social
networks and help activate sales
 Enable a sales rep to become a value-added resource to the retailer owner and improve the
quality of client interactions
Business Challenges
 Mobility is required as a key component because analysis must be put in the field to get value
 Customer is mobilizing this solution in the Florida market through a proof of concept
Process Innovations
 Analyze past sales and suggest bundles based on like customer profiles and consumption
patterns
 Mobilize insights on an iPad to make the sales person to be more effective with the customer
Contribution of SAP HANA
 Real-time offer and suggestions: Suggest buying quantities based on consumption patterns
(frequently ordered items)
 Ability to up-sell orders based on discount levels and promotions
Value Drivers and KPIs
 Improve the number of sales transactions where cross-sell and up-sell is offered
Innovation scope
SAP HANA Platform (customer-specific)
End-to-end (E2E) solution
Consumer products – enterprise marketing
optimization
Value potential 5
Feasibility 5
Low High
1 5
Low High
1 5

A leading distributor of fine wines and spirits – Warehouse
benchmarking report
 Enable warehouse employees to see how the warehouse is performing in real time
 Enable employees to work toward targets in real time and reassign resources as needed
throughout the warehouse
Business Challenges
 Warehouse operations are evaluated on 87 KPIs that would take 3 days to produce a
benchmark report
Process Innovations
 Warehouse workers monitor themselves and reassign themselves as needed throughout the shift
 The report now runs in less than 10 seconds, allowing it to be displayed in the warehouse on
large dashboard monitors
 Improve warehouse efficiency
 Improve employee satisfaction
Innovation scope
SAP HANA Platform (customer-specific)
Wholesale distribution – warehouse
management
Value potential 4
Feasibility 5
Low High
1 5
Low High
1 5

Wholesale distributor – Strategic customer stratification
 Enable sales staff to improve gross margin by stratifying customers by margin contribution and
other key factors
Business Challenges
 Sales and support staff were unaware of which customers contributed to margin and which
drained service resources
Process Innovations
 Sales and service staff can now tailor their level of service based on the contribution of the
customer to overall margin and drive low-margin customers toward low cost-to-serve
engagement models
 SAP HANA provides the processing speed required to give real-time data access
 Improve gross margin
 Improve earnings
Innovation scope
SAP HANA Platform (customer specific)
Wholesale distribution – customer stratification
and cost to serve
Value potential 5
Feasibility 4
Low High
1 5
Low High
1 5

Wholesale distributor – Profitability and pricing analysis
 Profitability and pricing analytics: Increase buy-side profit through detailed analysis and supplier
evaluation. Improve supplier negotiation to increase margins
Business Challenges
 The company needs to perform more granular profitability analysis at both the customer and
product levels
 It lacks margin insight at the customer and product levels and cannot segment customers or offer
better service levels
Process Innovations
 Enforce business-process standards and improve visibility into the overall planning process at
the company with a unified data platform
 Perform profitability analysis at the most detailed customer and product levels, including both
branded and generic data
 Improve customer segmentation with detailed analysis of customer and product data
 Gain insight into margins at customer and product levels to negotiate contracts with suppliers
 Simulate margin erosion on price negotiations before signing a supplier contract
 Improve gross margin
Innovation scope
SAP Business Suite on SAP HANA (now and
in the future)
Wholesale distribution – customer stratification
and cost to serve
Value potential 5
Feasibility 4
Low High
1 5
Low High
1 5

Wholesale distributor – Supply-chain optimization analytics
 Supply-chain optimization analytics: Enable fact-based decisions on a single holistic platform to
optimize the supply chain and support initiatives to reduce working capital
Business Challenges
• Missed opportunities to optimize the supply chain based on better and more timely analysis of
company data:
• Inability to identify impact on margin from decisions based on a hunch
• Inability to analyze at the most-detailed level across all SKUs, customers, time series,
and distribution centers
• Lack of a systematic approach, causing lengthy manual processes and data-integrity
issues
Process Innovations
 Identify opportunities more systematically by analyzing complete and detailed supply-chain data
holistically; analyze all aspects such as inventory levels, manufacturer information, customers,
and financial data
 SAP HANA can be the one and only data repository for all supply chain data (SAP and non-SAP)
directly from source systems
 Working capital reduction
Innovation scope
SAP Business Suite on SAP HANA (now and
in the future)
Wholesale distribution – supply chain analytics
Value potential 4
Feasibility 4
Low High
1 5
Low High
1 5

Breaking the limits at Würth
We have a slogan at Würth: Break your limits. That means that we always want to get
better and better every day. The key value for the business is speeding up key
processes such as MRP, order entry, and invoice management.
Harald Holl, Responsible for IT infrastructure and data centers, Würth Group
AT A GLANCE
Objective
Proof of concept
Solution
SAP ERP powered by SAP HANA
Benefits
Accelerate key processes (material requirements planning
(MRP), order entry, and invoicing) and reduce the total cost
of ownership
Watch the video here

Delivering Real-Time Business Value for Wholesale Distribution

More Related Content

Similar to Delivering Real-Time Business Value for Wholesale Distribution (20)

More from SAP Technology (20)

Recently uploaded (20)

Delivering Real-Time Business Value for Wholesale Distribution