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Ariba Collaborative Supply Chain
High Level Introduction
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 2External
The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the
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presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation
and SAP's strategy and possible future developments, products and or platforms directions and functionality are all
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document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied
warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational
purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this
document, except if such damages were caused by SAP´s willful misconduct or gross negligence.
All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ
materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates, and they should not be relied upon in making purchasing decisions.
Legal disclaimer
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 3External
Agenda
Solution extension to direct goods
Proposition value today
Next steps
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 4External
Agenda
Solution extension to direct goods
Proposition value today
Next steps
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 5External
Ariba Cloud solutions
Spend
AnalysisSourcing
Contract
mgmt
Operational
mgmt
Invoice
mgmtPaymentSupplier mgmt
ARIBA
SPEND
VISIBILITY
ARIBA
SOURCING
ARIBA
CONTRACT
ARIBA
SIPM
ARIBA
CATALOGSARIBA
PROCURE TO
ORDERPO & INVOICE AUTOMATION
ARIBA INVOICE
PRO
ARIBA PROCURE TO PAY
ARIBA
DISCOUNT
MANAGEMENT
Sourcing projects
RFI, RFP,
eAuction
Scoring
Negotiation
Libraries
Repository
Supplier profiles
Qualification
Performance
Catalogs
PR and PO
Approval
workflow
eInvoicing
Reconciliation
Invoice status
update
Dynamic
discounts
Payments
Remittance date
update
Consolidation
and data
cleansing
Spend analysis
Benchmarking
ARIBA SERVICE PROCUREMENT
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 6External
Ariba is Extending Beyond Indirect Procurement into Direct
Materials Procurement/Supply Chain Collaboration
Indirect: goods or services that do not end up in the product delivered to the customer;
the spend is tracked under OPERATING EXPENSES.
Direct: procurement of goods or services that go into production and are at the core of the product
delivered to the customer and related spend is tracked under COST OF GOODS SOLD, including:
Merchandise vendors stocking retail shelves
Contract manufacturing of the final product
Manufacturers of subassemblies
Component suppliers
Raw material suppliers
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 7External
Why Collaborative Supply Chain?
For Buyers
• Complete Visibility to Supply
• Reduce Inventory Levels
• Reduce Supply Chain Risks
• Single Business Network Collaboration Platform
with embeded Supplier Enablement Service and
Build-In Integration to SAP
For Suppliers
• Complete Visibility to Demand
• Superior Service to Customers
• Increase Order Fill Rates & Inventory Turns
• Single place to serve multiple Customers
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 8External
Contractmanufacturers
Subassembly suppliers
Complex Manufacturing Supply Chains Inhibit Visibility into Supply
Large
enterprise
OEM
Component suppliers
Raw material suppliers
More outsourcing
More trading partners
More to track
More geographies
More technologies
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 9External
Lack of Visibility Inhibits Collaboration
of manufacturing is
outsourced in a typical
company
of buyers have poor
visibility into
source of supply
of suppliers lack visibility
into customer
order management
32%
65%
70%
Without visibility, complex supply chains
risk:
• High safety stock levels
• High inventory carrying costs
• Stock-outs and missed or delayed
shipments
“Supply chains…need visibility across multiple systems to
synchronize manufacturing and procurement.”
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 11External
Agenda
Solution extension to direct goods
Proposition value today
Next steps
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 12External
Direct Material Collaboration Process in Mfg IndustriesDesign > Plan > Source > Make > Deliver > Enable
PLM/PDM
Demand/
Supply
Planning
Market
End
Customer
ERP
Sales/MRP/Purchasing
Contractmanufacturers
Subassembly suppliers
Component suppliers
Raw material suppliers
Supply Commit
RFQ/RFX
BOM/Eng
Net Demand Forecast Visibility/Subcon PO
Forecast/Purchase
Order/Release
Purchase Order
ASN
Purchase Order
ASN
Purchase Order
ASN
OwnMfr Plants
ASN/Invoice
Demand
Supply Plan
SourcingContract
Supply
Logistics Provider
Logistics Provider
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 13External
Ariba Collaborative Supply ChainDirect Purchase Orders
13
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
BuyerSupplier / Contract
ManufacturerBenefits
• Ability to communicate granular
demand by multiple dates and
quantities
• Facilitates efficient order
fulfilment process by Direct
Material suppliers
PO’s with Delivery Schedules
PO Confirmation
Goods Receipt Notice (POD)
Advance Ship Notice
Self Billing/ERS Invoice
Payment
Invoice
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 14External
Manage Complex Requirements with Purchase Order
Extensions
• 100 new direct material fields that
support direct material processing
• Additional product characteristics
such as promotional deal ID, size
quality, grade, color, etc.
• 38 fields for product packaging such
as container serial code, shipping
mark, length, weight, etc.
• Suppliers can view and edit these
fields when processing purchase
orders, ship notices and invoices
Show screen shots from video of item
characteristics and packaging descriptions
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 15External
Organize and Prioritize Direct Materials Shipments
with Ship Notice Due List
• Seller can create Ship Notice Due List
based on customer, ship-to location,
product, purchase order, and due date
• Automatic grouping of multiple
purchase orders by customer and
customer location to consolidate
orders into a single shipment
• Creates ship notices that span
multiple purchase orders, and
combines items from both purchase
orders and scheduling agreement
releases
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 16External
Ariba Collaborative Supply ChainScheduling Agreement Release Collaboration Process
16
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
Benefits
• Improved visibility into
availability of supply
• Greater transparency for
suppliers into longer term and
near-term demands of their
customers
• Flexible invoicing options,
including self-billing and
supplier-generated invoicing
Buyer
Schedule Agrt Release (FRC/JIT)
Goods Receipt Notice (POD)
Supplier / Contract
Manufacturer
Advance Ship Notice
Self Billing/ERS Invoice
Payment
Invoice
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 17External
Communicate On-Going Demand with Scheduling
Agreement Releases
Create rolling delivery schedules to
indicate the degree to which the lines of
schedule are binding:
• Firm zone (go-ahead for production).
This is firm and fully binding
• Trade-off zone (go-ahead for
procurement of input materials). If you
cancel, the vendor is only entitled to
charge for material costs
• Planning Zone (forecast)
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 18External
Ariba Collaborative Supply ChainContract Manufacturing Collaboration Process
18
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
Benefits
• Allows buyer to leverage
purchasing power while
maintaining visibility and control
into contract manufacturing
process
• Improves visibility into
availability of supply, Inventory
and production status
• Drives greater efficiencies
between multiple supply chain
parties
BuyerSupplier / Contract
Manufacturer
Subcontract Purchase Order
Issue Subcontract Components
Component Inventory Status
Goods Receipt Notice
Component Receipt Notice
PO Confirmation
Component Consumption Notice
Advance Ship Notice
Self Billing/ERS Invoice (Option A)
Component Ship Notice
Payment
Invoice (Option B)
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 19External
Provide Manufacturing Partners with Components and
Gain Visibility into Component Consumption
Enables contract manufacturing processes
utilizing components shipped by buyer
• Enables contract manufacturing
partners to drill down into component
lines from an assembly PO
• Allows buyers to ship components to
contract manufacturers and gain
visibility into usage
• Enables contract manufacturers to
report receipt and consumption of
components with relevant batch
information, ensuring greater
predictability of supply
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 20External
Ariba Collaborative Supply ChainConsignment Collaboration Process
20
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
Benefits
• Improves buyer cash flow and
inventory turns by deferring
transfer and payment of goods
until they are consumed.
• Provides suppliers with visibility
to movements related to
consigned inventory.
• Minimizes risk of material
stock-outs
• Reduces replenishment lead
times
Buyer
Consignment Purchase Order
Consumption: Consignment Transfer
Consignment Stock Receipt Notice
Supplier / Contract
Manufacturer
PO Confirmation
Advance Ship Notice
Self Billing/ERS Invoice
Payment
Invoice
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 21External
Consignment Inventory Movement Visibility
Replenish and receive consignment
inventory and transfer it to your stock
as needed
• Obtain and share visibility into
material movements with suppliers
• Signal change of ownership of
inventory and settle payment to
suppliers
Schedule Agreement
Direct Purchase Order
Contract Manufacturing
Consigned Inventory
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 22External
Improving Collaboration in the Direct Material Supply Chain
Summary of Key Innovations
Collaboration Benefits
Purchase Order
• Delivery Schedule Support
• Direct Material/Retail Extensions
• Streamlines PO’s by adding multiple delivery schedules per line item
• Supports critical extensions such as packaging information
Scheduling Agreement Release
• Forecast & JIT Releases
• Provides suppliers with transparency into longer term demands of their customers .
• Provides efficient way of communicating plan-driven demand in repetitive mass
manufacturing environments
Contract Manufacturing • Provides end-to-end visibility into subcontracting process, including physical component
movement and component consumption
Consignment • Provides end-to-end support of consignment procurement through settlement process
• Allows suppliers to trigger replenishments and invoicing as needed
Ship Notice Due List • Delivers greater flexibility and more efficient view of shipments due
Confirmation Due List • Streamlines processing of high volumes of orders
• Ensures predictability of supply and better production planning
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 23External
Open Integration Framework
Seamless integration with your existing IT environments
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 24External
What Makes a Business Network Different from EDI?
Intelligence and Flexibility
EDI OR 1:1 INTEGRATIONS
• Processes customized per trading partner
• EDI formats and connectivity standards
• No business logic
• No aggregated data content or history
BUSINESS NETWORKS
• Standardized processes
• Multiple connectivity options
• Configurable rules and business logic
• Community intelligence
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 25External
Agenda
Solution extension to direct goods
Proposition value today
Next steps
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 26External
SAP Ariba Collaborative Supply Chain Solution Is in Year Two of a
Multi-Year Journey
A basis for direct
materials collaboration
on execution processes
Extends to support outsourced
manufacturing and consignment
inventory scenarios
Expanding into additional
process areas to support
forecast collaborations
related to Planning
Inventory and Quality
Collaborations
Multi-Tier Collaboration Scenarios
Mobile, Network Intelligence
CSC 1.0
CSC 2.0
CSC 3.0FUTURE
!
Better sharing of planning & execution information
More processes enabled
Increased access to intelligence
Value Levers at Each Stage Upcoming
Release
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 27External
SAP Ariba Collaborative Supply ChainForecast Collaboration - Planned in Q1,2016
27
BuyerSupplier / Contract
Manufacturer
Benefits
• Early visibility of net demand
for suppliers to support forecast
visbility scenarios
• Enables collaboration to
support ability to receive
current capacity/inventory
status and collobarate with
suppliers on supply plans to
meet end cusomers demands.
Forecast (Net Demand from MRP)
Forecast Commit
Inventory Level
Industry Relevance
• Predominant process across
Manufacturing/CPG Industries
Forecast (UnConstrained Supply
Plan)
Forecast Visibility Scenario
Forecast Commit Scenario
Forecast (Constrained Supply
Plan with supplier commits)
Mfg Planning Visibility
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 28External
End to End Forecast Collaboration
Provides time series view of
forecast for suppliers.
Flexible UI supports
• Search Filtering
• Configurable Data
• Related Firm Orders
• Supplier Commit Updates
• Excel Download/Upload
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 29External
Ship Notice Barcode Printing
Custom PDF Layout – Barcode Label sample (1/4)
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 30External
Ship Notice Barcode Printing
Custom PDF Layout – Barcode Label sample (2/4)
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 31External
Ship Notice Barcode Printing
Custom PDF Layout – Barcode Label sample (3/4)
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 32External
Value to Customer/Supplier Solution
Challenges of lack of Inventory Visibility
include
• Using information strategically to improve
service levels, reduce obsolescence and
ensure compliance with QA.
• Reduction of Stock Outs
• Improved operational efficiency by
automating the exchange of information
between all partners and by providing
decision support capabilities and
consolidated visibility to the end-to-end
process.
Business Benefits of Forecast
Collaboration
• Lower inventory levels through increased
inventory visibility.
• Reduce obsolescence cost by better
utilization of available inventory in the
supply chain.
• Improve order fill rates through
comprehensive visibility into all available
sources of supply.
Industries
• All Industries
Part Inventory Monitor
Provide Inventory Visibility for Buyer and Supplier .The view should include different Stock Types (Unrestricted/Consignment), Stock Categories
(Unrestricted, Blocked, Quality) and ownership status of the inventory
SMI/VMI Monitor
VMI Monitor to allow suppliers to View Stock levels, Demand, Stock on Hand, In transits, Projected stock, Planned Receipt, Firmed Receipt,
Min/Max, Stock Alerts
Component Inventory Monitor
Component Inventory View with both supplier and buyer updates of on hand Inventory at Batch level to facilitate inventory reconciliation in Contract
Manufacturing scenario's.
WIP Monitor
WIP report Allow the Suppliers and Buyers to view WIP status at the PO item level including the consumption data, batch details.
Exception Monitor
Allow Supplier and Buyers view exceptions and alerts to mange the Business process .
Inventory Collaboration – Future Functionality
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 33External
Value to Customer/Supplier Solution
Business Benefits
• Sharing of quality related data with supply chain partners to drive
issue visibility and quick resolution
Customer:
• Manage non-conformance of suppliers and contractors.
• Provide transparency into rework or return of non-compliant product
• Ability to communicate and transact return of excess or obsolete
inventory
Supplier:
• Ability to expose quality issue to customer for components provided to
ensure timely replenishment
• Enabled to quickly respond to reported product quality issues
Industries
• All Industries
Planned Solution
- Quality Notification, Return Delivery and Return PO
• Ability to receive quality notification (rework order) in Ariba Network from
customer’s backend system (finished product) with reference to existing
document
• Ability to receive a return delivery in Ariba Network from customer’s backend
system with reference to a document
• Ability to receive a return purchase order in Ariba Network from customer’s
backend system
• Ability to create quality notification or a Deviation Request in Ariba Network by
supplier / contract manufacturer (component) with reference to existing
document
- Invoicing
• Ability to send invoice to the vendor via Ariba Network for rework of non-
compliant product
- Reporting/ Certificates
• Ability to feed quality related data into vendor evaluation
• Ability for buyer to communicate report of quality issues to vendor (8D report)
• Ability for vendor to send Certificate of Analysis prior or along with shipment
• Ability to communicate testing results
- Batch Management
• Ability to cross reference customer and supplier / contract manufacturer
batches
- Alerts/Notifications
• Inform vendor about pending rework at cost and acceptance thereof
• Inform users of quality notification having been raised
Quality Collaboration - Future Functionality
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 34External
Ariba Network - Platform Enhancements - Near FutureUsability Improvements
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 35External
Ariba Network - Platform Enhancements - Near FutureMobile Access for suppliers
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 36External
SAP Ariba Collaborative Supply Chain Buy Side Integration Status as of Dec 11, 2015
Process Related Documents
Relevant for Count towards number of Doc Types in Connection Services Setup
SAP Add-on Cloud
Integration
Direct Purchase Order
Collaboration (CSC1.0)
Purchase Order,
PO Change, PO Cancel, Confirmation, ASN, Goods Receipt, Invoice or CC Invoice,
Payment Advice
SP08 – Aug 2015 CI-6 – Sep 2015
Scheduling Agreement
Release Collaboration
(CSC1.0)
Scheduling Agreement Release, ASN, Goods Receipt, Invoice or CC Invoice,
Payment Advice
SP08 – Aug 2015 CI-3
Sub Contract PO
Collaboration (CSC2.0)
Sub Con Purchase Order^,
PO Change, PO Cancel, Confirmation, Component Ship Notice*, Component Reciept*,
Component Inventory, Component Consumption, ASN, Goods Receipt, Invoice or CC
Invoice, Payment Advice
SP09 – Dec 2015 Planned for CI-8 –
July 2016
Consignment Movement
Collaboration(CSC2.0)
Consignment Purchase Order^,
PO Change, PO Cancel, Confirmation, ASN, Goods Receipt, Consignment
Movement Visibility, Invoice or CC Invoice, Payment Advice
SP09 – Dec 2015 Planned for CI-8 –
July 2016
Green – $ Chargeable Document towards Annual Document Usage
Bold – Most Common, Italic - Optional depending on customer requirements
*Only Technical Implementation, Requires Project Work.
^ Does not count towards number of Doc types for Connection Services Setup
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 37External
SAP Ariba Collaborative Supply Chain Buy Side Integration Status as of Dec 11, 2015
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 38External
One Network to Simplify Supply Chain CollaborationProcure-to-Pay Collaboration in Real-Time
Faster
response to
manage
inventory
levels and fill
rates
Easy
onboarding
with minimal
IT costs
Improved
compliance with
standards-based
and open
electronic
communications
Simplifies
interactions
and
transactions –
connect once,
collaborate
with many
Network
intelligence,
reporting and
analytics on
supply chain
metrics
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 39External
Ariba Collaborative Supply Chain: Early Adoption in Key IndustriesNote: These Accounts Are in Early Deployment Phases
Gartner ranked SAP the overall leader in worldwide supply chain management and supply chain planning*
*source: “Market Snapshot: Supply Chain Management Software, Worldwide, 2013” report.
ULTA Beauty
80% of merchandise vendors are live
Exchanging all EDI transactions – PO,
PO Confirm, ASN, Invoice
Significant efficiency in AP department
Manitowoc Crane
Ariba Design Partner
€200M scaling to €1B in direct materials
spend collaboration
Supporting Business transformation effort
to lean manufacturing
© 2015 SAP SE or an SAP affiliate company. All rights reserved.
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