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© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
Leveraging Latest EWM & TM 9.0 Releases
in a Global SAP Reimplementation
sigma-aldrich.com
• September 2013
Gilles Fellous Senior IT Director
Distribution & Trade Compliance
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• About Sigma-Aldrich
• Why an SAP Global Reimplementation Project?
– Current SAP Landscape
– Future SAP landscape
– Timeline & Execution Methodology
• Warehousing Solution(s)
– Challenges
– Findings
– Decision
• Transportation Solution(s)
– Challenges
– Findings
– Decisions
• Conclusion
2
Agenda
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
43%
37%
20%
GLOBALLY BALANCED 43% Total Americas
37% Europe, Middle East, Africa
20% Asia Pacific
$2.6 Billion 53%
24%
23% 21%
79%
BROAD END-MARKETS 53% Research
23% Applied
24% SAFC Commercial
QUALITY PRODUCTS >170,000 Reagents and
Chemicals
45,000 Laboratory
Equipment Items
$2.6 Billion >200,000
Products
• 9,000 employees
• Sales in 160 countries
• 1.4 million individual customers
• More than 50 offices in 30
countries
• Sigma-Aldrich manufactured
products generate 60%
approximately of Company sales
FACTS AND FIGURES KEY STATS
* 2012 Figures
DELIVERING VALUE THROUGH A DIVERSIFIED PORTFOLIO
NO CUSTOMER COMPRISES MORE THAN 2% OF SALES
NO PRODUCT COMPRISES MORE THAN 1% OF SALES
• “But several NASDAQ stocks that got little notice in 2000
turned out to be the real stars, including scientific gear maker
Sigma-Aldrich…Sigma-Aldrich is up 600% since 2000,
the best performance in the NASDAQ 100 after Apple.” Source: USATODAY.com – March 5, 2013
THREE TOP NASDAQ PERFORMERS
1.
2.
3.
38+ CONSECUTIVE YEARS OF EARNINGS GROWTH
Sigma-Aldrich at a Glance
3
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
Examples of use:
• Products for biopharmaceutical drugs
• Advanced drugs intermediates
• APIs for small molecule drugs,
• Products for therapeutic products in
clinical trials.
• New LED precursor
Examples of use:
• new car smell
• tooth paste minty taste
• sports doping levels
• clinical and forensic toxicology
• CSI investigations
Examples:
• Eight million unique chemicals on
website
• Whole genome research
• Pharma & Biotech R& D
Sigma-Aldrich Market-Focused Business Units
4
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• About Sigma-Aldrich
• Why an SAP Global Reimplementation Project?
– Current SAP Landscape
– Future SAP landscape
– Timeline & Execution Methodology
• Warehousing Solution(s)
– Challenges
– Findings
– Decision
• Transportation Solution(s)
– Challenges
– Findings
– Decisions
• Conclusion
5
Agenda
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
Import/Export Solutions
Germany SAP GTS
EMEA: cloud or broker
US: legacy + cloud
ROW: broker or local solution or
access DB solutions
Warehousing Solutions:
External WMS : Witron /Manhattan
RF: Teklogic, local legacy
Other: point solutions, access DB
Transportation Solutions:
Evcore, Clippership, Fedex, DHL , local
carrier platforms (Nordic, China, Latin
America) , Access DB (Japan, Israel,
else)
EXISTING NON SAP
Distribution Solutions
• COMPLEX
• OLD DESIGN
• HARD TO SUSTAIN
• POINT OF FAILURES
• LACK OF EFFICIENCY
• LACK OF FLEXIBILITY
• DUAL R/3 4.7 INSTANCES + OTHERS SYSTEMS
• INCONSISTENT VERSIONS AND UPGRADES
• > 13,000 CUSTOM OBJECTS, > 5 MILLION LINES
• MULTIPLE BEST OF BREED & POINT SOLUTIONS
• MULTIPLE INTERFACE TYPES
• LACK OF ACQUISITIONS INTEGRATION
Sales
Quote / Order
Processing
Pricing &
Variant
Configuration
Order
Tracking
Contracts /
agreements
Payment
Cards
Billing &
Outputs
Distribution
Delivery Due
and Shipping
Route Determi
nation &
carriers
Shipping &
Transportation
SAP
Warehouse
Management
Procurement
Direct
Procurement
Indirect
Procurement
Release
Strategy
MRP
Production
and Quality
Process
orders
Plant
Maintenance
PI Sheets
Inspection
Plans
Finances
Accounts
Receivable
Accounts
Payable
General
Ledger
Controlling &
Profitability,
Costing
Reporting &
GAAP
Trade
Compliance
Order
Screening
Haz Goods
regulations
MSDS
Imp / Export
GTS & FTZ
labels
EXISTING SAP SYSTEMS
Standard Configuration Custom code
Sigma-Aldrich Current SAP Landscape 1997-2013
6
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
7
• SAP ERP + SAP BEST OF BREED TIGHTLY INTEGRATED
• SINGLE SOURCE OF TRUTH FOR MASTER DATA
• UNIQUE USER INTERFACE
• ISOLATED MINIMUM TOUCH POINTS
• SIMPLIFIED
• FLEXIBLE
• SUSTAINABLE
• CONSISTENT
• FASTER M&A INTEGRATION
Sigma-Aldrich Future Landscape: SAP Greenfield Project
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
8
• Agile methodology allows for frequent inspection and adaptation, faster results,
more transparency and increased flexibility at a reduced investment.
Sigma-Aldrich SAP Next :Agile Execution Methodology
Go Live
Mid 2014
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• About Sigma-Aldrich
• Why an SAP Global Reimplementation Project?
– Current SAP Landscape
– Future SAP landscape
– Timeline & Execution Methodology
• Warehousing Solution(s)
– Challenges
– Findings
– Decision
• Transportation Solution(s)
– Challenges
– Findings
– Decisions
• Conclusion
9
Agenda
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
10
Plant Purpose Locations Shipping Mnfng
Inventory
Owner-
ship
Current
System
Design
Model
Central Distribution Center
(very large & automated) USA (1), Germany (1) Y N SIAL
Manhattan (US) & Witron
(DE)
A
Regional Distribution Center
(medium to large)
USA (3), Canada, France, UK, Germany (2), Singapore, India,
China (2), Japan, Australia, Korea, Israel,
Brazil (2), etc.
Y N SIAL SIAL SAP B
Local Distribution Center (small)
US (1), Sweden, Ireland, Mexico, Argentina,
South Africa, Malaysia, etc.
Y N SIAL SIAL SAP C
Controlled Substances Storage
(tiny - legal purpose) France, Germany, UK Y N SIAL SIAL SAP C
Back-up Only Warehouse USA (2) N N SIAL SIAL SAP C
Indirect Plant w/ Inventory Planning
USA (2), Switzerland N N SIAL SIAL SAP C
Indirect Plant w/o Inventory Planning
35 (1 per country) N N SIAL SIAL SAP D
Manufacturing Plant
USA (15), Brazil, India (2), China (2),
Switzerland, Germany (4), UK (4), etc.
Y y SIAL SIAL SAP E
3rd Party Logistic or Vendor
USA, France, UK, India, Germany, Australia, NZ
Y N SIAL or 3PL or
Vendor
SIAL SAP or 3PL or
Vendor F
Customer Stock Room Management
Everywhere Y/N N Customer SIAL SAP F/G
Multiple Challenges
• 100+ plants worldwide
• variable purpose, size & models
• >1 million SKUs of all sizes
• Global and local regulations
• Avoid heavy custom solutions
• Transparent Plant switching.
• Best in class warehousing
• Best in class productivity
• Low touch user experience
Our Approach
3 months hands-on POC
comparing latest ECC6 WM &
EWM warehousing features
The Warehousing Challenge
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
System Score Comments
ECC6 WM ++ Has main features but limited breadth
SCE EWM ++++ Covers all requirements, high sophistication, easy to copy
SAP EWM Feature
• Allows design template library of storage types &
copy/paste easily to other plants
• Multiple put-away strategies are allowed
11
Findings 1: Inbound Process & Storage Strategy
• A midsize plant (here Lyon) is >30
zones for storage/put-away strategy
• By hazardous material class
• By storage temperature
• By storage type (pallet, shelf, safe)
• By legal needs (customs zone, drug)
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
System Score Comments
ECC6 WM + Has average features to address productivity – will need code
SCE EWM ++++ Optimized picking can bring walk <30 km/day & productivity lines/hour up 25%
Ability to organize packing by single shipping units (cartonization)
Lyon: Typical pick way and hot picking spots (flags)
• Current productivity has limiting factors
• Pick wave = 1-6 deliveries, each being multizone
• Approximately 45km total walk/day
• Max productivity in lines/hour is limited
• Packing needs heavy computer interaction.
• SAP EWM Feature
• Possible to manage various creation rules
of the picking warehouse orders (up to 7)
• Grouping of tasks per consolidation group
• Grouping of tasks to optimize the zone pick
& waves etc.
12
Findings 2: Outbound Process Pick/Pack Productivity
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
System Score Comments
ECC6 WM + Has ECC6/EHS checks foundation but limited room for expansion
SCE EWM ++ Together with TM, provides the basic foundation
Room to enrich via transport change (TM) or box split (EWM cartonization)
• SAP DG Solution findings
• Maintenance saving SAP regulatory content
• More robust than Sigma-Aldrich custom
• Strong match for quality “Yes/No” checks
• No “quantity-related” check for one/multiple chemical
• Block instead of providing alternatives by changing
mean of transports or splitting boxes
DG Analysis: Sigma-Aldrich Customs vs. SAP EHS/EWM
Sigma-Aldrich
Scenarios
Complexity
Data Collection &
Check
Check if Allowed
Incompatibilities
Limited Quantities,
separations (SPE)
Proposals: change
transports , split
boxes)
SAP DG Data
Collection & Check
SAP DG Check if
Allowed
SAP Incompatibilities
SAP Limited
Quantities,
separations (SPE)
SAP Proposals:
change transports ,
split box
SAP DG
GAP
SAP DG
MATCH
Sigma-Aldrich
coded Solution
13
Findings 3 Outbound: Dangerous Goods (DG)
• Not fully addressing our needs but
reducing significantly the gap with
very strong foundation
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
System Score Comments
ECC6 WM - Limited solutions – Sigma-Aldrich customs to be reproduced
SCE EWM ++++ Addresses most requirements
EWM Decanting Solution for packaging “make to order” bulk inventory & bringing raw material to manufacturing
EWM Value-Added Services Kitting: meet needs for individual kit components stored in various zones (hazardous material,
temperature) or for commercial bundles where items stored as individual SKUs.
Cross Docking EWM only provides sophisticated approach to replace custom code for 1) shipping backorders
from Goods Receipt and 2) bypassing storage in manufacturing to replenish DC.
End-User Experience EWM has native RF & voice and can include other visual, light and touch screen solutions.
14
Findings 4: Other Warehouse Functionalities
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
Coverage
• EWM fits multiple models from distribution to pure manufacturing.
• EWM is the fit for all our large and midsize plants.
• EWM with interface to automation seems best candidate for replacement of external
WMS.
Decision
• Sigma-Aldrich does not wish to have multiple systems, nor duplicated maintenance plus
additional custom code solution for smaller WM plants.
• With proper front end simplification, EWM could also be used for smaller plants.
Decision is to harmonize landscape & use EWM in all 70+ plants with managed
inventory.
Timetable
• Q2 2014: First pilot plant in midsize distribution center
• Q4 2014: Second pilot plant in midsize manufacturing site
• 2015 Global deployment
• After: Replacement of external WMS systems
15
Warehouse Selection & POC Conclusions
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• About Sigma-Aldrich
• Why an SAP Global Reimplementation Project?
– Current SAP Landscape
– Future SAP landscape
– Timeline & Execution Methodology
• Warehousing Solution(s)
– Challenges
– Findings
– Decision
• Transportation Solution(s)
– Challenges
– Findings
– Decisions
• Conclusion
16
Agenda
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
17
• Multiple Challenges • Current SD transportation too limited
• 70% parcel (LTL, road & air)
• 30% large international (air, ocean)
• Complex global and local regulations
• Dangerous Goods
• Carrier documentation
• Carrier tracking
• Avoiding heavy custom solutions
• Provide Analytics for potential savings
Our Initial Approach Just plug SAP TM at the end of
shipping for leveraging module
execution, tracking and settlement
The Transportation Challenge
4 Transport Modes + Multimodal 200+ Carriers Labels, Pricing, Tracking
$$$ Savings and Analytic Hazardous / Non-Hazardous
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• Air freight & Sea freight, TM does provide a strong foundation • Tendering booking, waybill
• Hazardous documentations (with same limitations as EWM)
• Road parcel management, TM does provide starting platform • Capacity management, road waybill is strong
• Hazardous documentations (with same limitations as EWM)
• No templates for main carriers (rate card, labels, EDI exchanges)
• No sophisticated parcel management solution
•
Settlement and self-billing, TM does provide a strong foundation • Strong settlement functionality
• Strong integration with ECC procurement and finances
System Score Comments
SCE TM ++ Covers most requirements, but lot of work needed for
parcel management
Receive DTR
from ECC6
Update Freight
Order
Freight
Settlement
Transport
Charge
Management
Execution
Carriers
Outputs
DG
Outputs
18
Findings 1: Expected TM Opportunities
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• By Exploring features, we realized TM has the capacity to
introduce very significant process changes at Sigma-Aldrich:
1. Influence Value proposition to customers
2. Influence Planning and Operations
3. Impact more significantly our Transportation Spendings
4. Influence our global distribution network and role of each plant.
System Score Comments
SCE TM ++++ Force Paradigm shift at Sigma-Aldrich
Receive OTR from
ECC6
Create Freight
Unit
Create Freight
Order
Planning
Order
Management
Optimiz
er
Freight
Tendering &
Booking
19
Findings 1A: Unexpected TM Opportunities
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• Our current customer front-end ,SAP and Web, shall move
to a “best in class” value proposal
• Current design lacks flexibility to new & local services due to SD
and Web custom code.
• Sigma-Aldrich offer can evolve to multiple services / delivery
proposal for multiple costs options and localized for each country
around the world.
• Seamless alignment between SD proposal and TM capability is
now possible without code.
Any SD order changes reflected seamlessly in TM
• Carrier flexibility since no longer “hard-selected” at order entry
• Guaranteed on-time delivery
• Missing: real-time link between SD ATP & TM optimizer
20
Findings 2: Changes Introduced by TM in Our
Value Proposition to Customers
Example only: Copy of Public Amazon screen
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
21
• We will build a “Never Late customer delivery” concept for a reduced operating cost:
1. TM planning optimizer regulates the overall workload: compute multiple criteria to determine best
carrier, priority, cut-off, DG solution, issue date and will trigger delivery creation only when needed.
2. Significant Operations productivity gains via planning, booking and standard documentation
3. Minimum 5% expected transportation savings for both domestic (optimizer) and international
(tendering) while streamlining process.
4. Switch allocation to various carriers , rationalization
5. Event management should enable us to identify incident and take immediate action / new planning.
6. Customer delivery date will always be on time or earlier for a lower transportation cost.
Findings 3: Changes Introduced by TM in
Shipping Operations
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
22
• TM enables key global and complex functionality we could never do easily before:
1. Multi-modal consolidation/deconsolidation will change dramatically our transatlantic
distribution replenishment planning approach.
2. Global drop shipment directly to end customer is now possible by coupling international
transport with GTS customs operations.
Findings 4: Changes Introduced by TM to our
Global Distribution Network
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
Coverage: • TM covers very well air and sea freight while more limited for road parcel
management.
• TM is enabling transportation savings.
• TM is supporting major business changes and impacting ECC6 and other SAP
modules.
• TM can be automated for domestic planning and almost transparent to small
plants.
• TM together with EWM provide strong combination while avoiding unnecessary
interface complexity.
Decision Decision is to leverage all TM capabilities and opportunities for business
changes.
Timetable • Q2 2014: First pilot plant in midsize distribution center
• 2015: Global deployment
• 201x: Continuous enhancement and network redesign
23
Transportation Solution TM Conclusion
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
• About Sigma-Aldrich
• Why an SAP Global Reimplementation Project?
– Current SAP Landscape
– Future SAP landscape
– Timeline & Execution Methodology
• Warehousing Solution(s)
– Challenges
– Findings
– Decision
• Transportation Solution(s)
– Challenges
– Findings
– Decisions
• Conclusion
24
Agenda
© 2013 Sigma-Aldrich Co. LLC. All rights reserved.
25
Customer Opportunities
• EWM and TM appear to be amongst market leaders
for best of breed.
• EWM is addressing warehouse execution only.
• TM reaches out over all company processes.
• Global templates can be easily replicated.
• Tight Integration of EWM, TM, ECC6, EHS & GTS
Key Expected SAP Improvements
• TM features for parcel management
• Enhancement of dangerous goods toward more
proactive proposals
• Direct interface between EWM and TM to reduce
complexity
EWM
Extended Warehouse Management DG
Conclusion: Our Distribution & Trade Compliance
Landscape