Delivering Real-Time Business Value for Chemicals

July 2013
Delivering Real-Time Business Value
for Chemicals
SAP Business Suite Powered by SAP HANA
Public

2© 2013 SAP AG or an SAP affiliate company. All rights reserved.
Uncertainty, complexity, and regulatory oversight
are increasing in today’s market. To help ensure
sustainable growth and performance, chemical
companies must constantly innovate and adapt
their products, processes, and business models.
 Safely optimize asset performance
 Meet demand at maximum profitability
 Position for globalization and growth
The real-time opportunity

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 3Public
Optimize
manufacturing
performance and
asset utilization
 Optimize asset performance and use by synchronizing
processes, enabling data-driven decisions, and
proactively managing risk and safety
Orchestrate
complex and
volatile supply
chains
 Help ensure reliable order fulfillment at maximized
profitability by managing supply and delivery to
consistently meet demand at minimum cost
Increase
returns on
product
innovation
 Get visibility into sales performance and pipeline for
profitable decisions based on management of prices
and margins
 Align product development with portfolio strategy,
market delivery, and global compliance
Driving profitable business globally
Drive agility and growth in chemicals

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 chemicals
Sustaining profitable growth
Customer-Centric Sales
and Marketing
Price and Margin
Management
Order and Contract
Management
Customer Service and
Support
Product Innovation and Integrity
Integrated Product Development
Product Safety and Stewardship
Integrated Quality Assurance
Information Risk Management
Manufacturing Performance and
Asset Utilization
Efficient Manufacturing Execution
Sustainable Operations
Manufacturing Visibility and
Performance
Asset Operations and Maintenance
Complex and Volatile
Supply Chains
Integrated Sales and
Operations Planning
Manufacturing Network
Planning and Execution
Logistics Fulfillment
People and
Talent
Core Human Resources
and Payroll
Talent Management
Time and Attendance
Management
Workforce Planning and
Analytics
Finance
Financial Performance
Management
Accounting and Financial
Close
Treasury and Financial
Risk Management
Collaborative Finance
Operations
Enterprise Risk and
Compliance Management
Procurement
Supplier Discovery and
Lifecycle Management
Strategic Sourcing and
Contracting
Procurement and Order
Collaboration
Collaborative Invoice to
Pay
Commodity Management
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Portfolio and Project
Management
IT Service Management
IT Strategy and
Governance
Technology
Solutions
Analytics Consumer ExperienceData Management Enterprise Mobility
SAP HANA Platform
Application Development
and Integration

Industry value map for chemicals
Real-time value for key end-to-end processes
Highest real-time
business value
for chemicals
Customer-Centric Sales
and Marketing
Price and Margin
Management
Order and Contract
Management
Customer Service and
Support
Product Innovation and Integrity
Integrated Product Development
Product Safety and Stewardship
Integrated Quality Assurance
Information Risk Management
Manufacturing Performance
and Asset Utilization
Efficient Manufacturing Execution
Sustainable Operations
Manufacturing Visibility and
Performance
Asset Operations and Maintenance
Complex and Volatile
Supply Chains
Integrated Sales and
Operations Planning
Manufacturing Network
Planning and Execution
Logistics Fulfillment
People and
Talent
Core Human Resources
and Payroll
Talent Management
Time and Attendance
Management
Workforce Planning and
Analytics
Finance
Financial Performance
Management
Accounting and
Financial Close
Treasury and Financial
Risk Management
Collaborative Finance
Operations
Enterprise Risk and
Compliance Management
Procurement
Supplier Discovery and
Lifecycle Management
Strategic Sourcing and
Contracting
Procurement and Order
Collaboration
Collaborative Invoice to
Pay
Commodity Management
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Portfolio and Project
Management
IT Service Management
IT Strategy and
Governance
Technology
Solutions
Analytics Consumer ExperienceData Management Enterprise Mobility
SAP HANA Platform
Application Development
and Integration
10 32
61
4
5
7 8 9

Today
KPI improvements are high-level estimates and will have to be validated for each customer situation.
With SAP Business Suite
on SAP HANA
Manufacturing visibility and performance
Business value for global plant performance management
 Inability to gather and visualize data
from production in real time to
improve the status of manufacturing
performance both within and across
multiple sites
 Inability to understand where
machine maintenance issues and
bottlenecks exist in production
 Need to capture the root causes for
downtime, efficiency loss, and poor
quality.
 Unplanned downtime, suboptimal
performance, and poor product
quality all contributing to decreased
asset utilization, poor product yields,
increased costs, and reduced
customer responsiveness
 Combines quantitative performance
measures with qualitative context and
reasons for performance issues
 Combines plant performance with
business context
 Facilitates corrective action at the
plant level and across plants
 Enables broader supply chain,
sustainability, financial, and
enterprise performance
improvements
 Enterprise-level overall equipment
effectiveness (OEE) that rolls up
plant-level OEE for enterprise
analytics and comparing assets and
performance across multiple sites
Improve
return on assets,
costs of goods sold,
and product quality
Increase
Reduce
resource utilization
and asset uptime
unplanned downtime,
changeover, and
waste by
5–10%

Today
Integrated sales and operations planning
Business value for demand-driven supply chain
 Increasingly difficult to access and
effectively use timely demand
information from the supply network
 Decisions often based on incomplete,
inaccurate, and often outdated
information
 Hardware and system landscapes
challenging to administrate
 Increase business/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
35%
Increase
Reduce
supply chain
performance
20%
total cost of
ownership (TCO)
25%
on SAP HANA

Today
Integrated sales and operations planning
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 weekly basis
 No ad hoc operational reporting
 Reporting, queries, and dashboards
that must be created by customers
on their own
 Not possible to run sub-daily planning
jobs and analyze the results because
of the long data preparation times in
SAP NetWeaver Business
Warehouse application
 Prevents fast response to ad hoc
queries from customer, which may
result in lost sales
 Decision support based on near real-
time information
 Information able to be updated via
delta capabilities
 Built-in analytical reporting scenarios
provided with streamlined data load
 Planned ability for customers to add
their own key performance indicators
(KPIs) and dashboards
 Advanced data retrieving and
computing functionality in SAP HANA
used to optimize the reporting of
supply chain planning data
Reduce
time spent compiling,
generating, and
waiting for reports by
40%
Increase
Optimize
visibility into key
supply chain data
in an easily
consumable way
analysis functionality
with multiple levels
of aggregation and
drill-down
techniques
on SAP HANA

Today
Asset operations and maintenance
Business value for asset planning and scheduling
 Maintenance scheduling that
consumes a great deal of time
 High amount of master data
influencing performance of data
maintenance
 Manual and error-prone process of
preselection of maintenance plans
 Potentially missing necessary
objects for maintenance calls
 High number of maintenance plans
that need to be scheduled, frequently
leading to a weekly scheduling
scheme
 Accelerated mass transactions
 Instant analysis on top of
transactions
 Preselection of due plans that speeds
up the process significantly
 Real-time analytics on all data
including machine sensor information
 Ability to schedule all maintenance
plans within a specific time frame
 Planning several times a day (instead
of once a week), resulting in
up-to-date scheduling information in
maintenance operations
 Faster response times leading to
more accurate maintenance
scheduling
Increase
asset utilization and
reduce unplanned
asset downtime by
5–10%
Maximize
Increase
asset uptime
schedule
adherence by
20%
on SAP HANA

Today
Order and contract management
Business value for sales
 Difficulty distinguishing profitable
customers from customer pool
 Inability to identify gaps in sales
pipeline leading to missed targets
 Extracting actionable information from
the enterprise-wide customer data
(Big Data) to maximize the chance
of a sale
 Minimal insight into buying preferences
of customers in social data context
 Easier identification of profitable
customers with account intelligence
analytics
 Faster transaction search
functionality
 Complete transparency into sales
pipeline based on real-time
information with unlimited drill-down
functionality
 Real-time analysis of Big Data to
better understand buying patterns
 Real-time access and assembly of
all data including social/sales data
Increase
profitability by
0.5–2%
Decrease
Improve
cost of sales
through balanced
territories by
5%
offer win rate by
2–5%
on SAP HANA

Today
Logistics fulfillment
Business value for inventory management
 No up-to-date view of the inventory
situation
 Need for accurate display of actual
stock to react quickly to stock
shortfall
 Time-consuming inventory
management reporting
 Real-time access to complex
inventory management data
 Real-time stock insight and
inventory monitoring
 High-performance inventory
management with large volumes of
documents
 Higher process efficiency in adjacent
procurement processes
Reduce
inventory levels by
2–5%
Improve
Optimize
service-level
agreements with
real-time product
allocation
working capital
on SAP HANA

Today
Financial performance management
Business value for profitability and cost analysis
 Data latencies and processes
delays impacting the ability to react
to issues and opportunities
 Lack of data depth and user self-
service affecting internal decision
making
 Long-running processes
 Time-intensive data queries
 Mostly manual data analysis
 Substantial amount of effort (time
spent) not directly adding value
 Suboptimal resource efficiency
and effectiveness
 Timely execution of critical business
processes that supports decision
making and increases the ability to
swiftly act (insight-to-action) in
dynamic market environments
 Critical transactions and calculations
that run quickly
 Instant response times on queries
 Prebuilt analytics automating the data
analysis process
 Leaner processes from data capture
through data analysis
 Increased productivity through
process-optimized analytics and
mobile support
Improve
service-level
performance
Reduce
Minimize
cycle times and
manual effort by
40%
operating costs
on SAP HANA

Today
Accounting and financial close
Business value for entity close
 Long running processes
 Time-intensive reconciliations
 Limited time for analysis
 Inefficiencies due to manual
processes and low automation
 Missing financial excellence
results in higher cost of equity
at the capital markets
 Difficulties in supporting parallel
financial reporting standards on a
global basis and in simulation of
scenarios
 More time for analysis, less overtime,
or earlier publishing of financial
results through faster
period-end processes and better
reconciliations
 Increased efficiency through smarter
reconciliations and reporting,
reducing operating costs, and
improving stakeholder satisfaction
 Real-time analytics down to the
lowest level of detail – delivering
quality at source, transparency, and
process efficiencies
Minimize
time to close the
entities’ books by
50%
Reduce
Enhance
cost of financial
reporting by
40%
compliance and
accuracy
on SAP HANA

Today
Collaborative financial operations
Business value for receivables management
 More time spent preparing data; less
time for analysis
 Collaboration beyond finance team
hindered by perceived system
complexity
 Limitations in analysis capabilities
and dimensions because of reliance
on finance aggregates
 Large data volumes that lead to
batch processing and reporting
latency
 Difficulty in identifying exceptions in
thousands of pages of reports
 Instant portfolio overview that lets
managers focus team efforts on
tactical wins
 Ability to involve sales executives
and other business partners to
accelerate collections and dispute
resolution
 More accurate document-level
calculation of days sales outstanding
(DSO) that allows identification of
root causes of changes to DSO
 Real-time reporting on all accounts
receivables data including credit,
collections, and disputes
 Anywhere, anytime access to key
receivables status
Increase
cash collections
and accelerate
dispute resolution
Reduce
Reduce
days sales
outsatnding by
2–5 days
uncollectable write-
off by
5–10%
on SAP HANA

Today
KPI improvements are high-level estimates and will have to be validated for each customer situation
Integrated product development
Business value for portfolio management (SAP Portfolio and Project
Management)
 Fact-based go/no-go decisions
require real-time information on the
status of the running projects and the
project proposals. Analysis for large
portfolios in the portfolio dashboards
is time-consuming, leading to lack of
transparency.
 Faster access to decision-making
information in dashboards, such as
status, timeline, and financials
 Accelerated comparison of running
projects and proposal in the
dashboards
Increase
transparency for
decision making
Improve
speed of
aggregating
financial information
 Aggregation of financials, such as
actual or planned cost, commitments
along the investment hierarchy takes
a long time for large portfolios.
Outdated information on the
investment increases review efforts.
 Manual editing of standard financial
KPIs such as net present value,
internal rate of return adds additional
tools and manual effort for portfolio
managers.
 Speeding up aggregation of
financials along the investment area
hierarchy
 Calculation of most important KPIs
based on values from financial
planning, removing manual
calculation
With SAP Portfolio and Project
Management on SAP HANA

Customer cases
Indian paint
manufacturer
 Support sales decision making and
corrective actions
 Improve effectiveness of trade
promotion spend
 Proactively track and manage
customer service level
European
petrochemical firm
 Financial performance management:
accelerated financial reporting
measured by increased employee
productivity
Leading U.S.
chemical
manufacturer
 One SAP NetWeaver Business
Warehouse on SAP HANA reporting for
supply chain management (SCM) real-
time planning analytics: ability to
modify customer service-level
agreement (SLA) based on profitability
to reduce inventory
Annual benefit
US$10.7 million
Annual benefit
US$2.4 million
Annual benefit
US$15 million

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

Painting manufacturer/chemicals
Summary of validated scenarios
Feasibility
Businessvalue
Legend
LowHigh
Low High
Pricing sensibility
analysis
SAP Business
Suite on
SAP HANA
SAP HANA
products
SAP HANA
Platform
Working capital
management
Inventory
optimization
Gross margin
analysis
Trade promotion
effectiveness
Sales visibility
Loyalty program
Order fill rate
Phase – deployment road map
Scenario
(business value)
1 Short term
CRM: Real-time sales visibility: sensitivity analysis
for margins and getting the margin visibility per
SKU for better and informed pricing and rebates
decisions; dealer profiling, geographical profiling
for driving marketing initiatives.
SCM: Real-time planning analytics (cut down the
days in inventory – one-time benefit)
FIN: Role analytics for efficiency
2 Medium term
FIN: Financial performance management
SCM: Real-time inventory management
3 In evaluation
Other functions – to be determined in future
discovery workshops
Annual revenue: US$1.8 billion
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 cases mapped to
industry value map end-to-end solutions

Customer case: A very large chemicals company
Summary of validated scenarios
Feasibility
Businessvalue
Legend
LowHigh
Low High
Real-time planning
analytics
(US$15 million)
Phase – deployment road map
1 Phase 1
Real-time planning analytics (Real-time
customer profitability reporting.; ability to modify
customer SLA based on profitability – reduce
inventory finished goods)
Annual revenue: US$38.7 billion
SAP Business
Suite on
SAP HANA
SAP HANA
products
SAP HANA
Platform
SAP HANA use cases mapped to
industry value map end-to-end solutions

Customer case: A very large chemicals company
SAP HANA Platform
15000
0
2000
4000
6000
8000
10000
12000
14000
16000
2013 Phase 1
Costs SoH Applications Platform
$
Actual SAP customer
business case
Annual benefits, SAP HANA
Platform
Annual benefits, applications
powered by SAP HANA:
US$15 million
Annual benefits, SAP Business
Suite on SAP HANA
Estimated deployment costs
Total transition cost
SAP HANA Platform: Anything built on the platform that is customer-specific – new business processes and business models
SAP HANA products: SAP NetWeaver BW powered by SAP HANA; high-performance apps (HPAs); applications – mapped to
IVM E2E solutions
Currently available functionality (SP0, 1, 2) – 23 scenarios mapped to IVM E2E solutions, and planned functionality(all of the
E2E solutions on the IVM are in scope)
SAP HANA Platform
SAP HANA products
SAP Business Suite on
SAP HANA
SoH = SAP Business Suite on SAP HANA

Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation
sessions and may not be completely validated.
Chemical manufacturer – sales visibility
Chemicals
Innovation scope
SAP HANA products (HPAs, applications)
End-to-end (E2E) solution
Chemicals – integrated sales and
operations planning
Value potential 5
Feasibility 3
Low High
1 5
Low High
1 5
Business context and goals
 Support sales strategy and decision making (such as loose tin vs. carton sales), dealer profile
(such as critical retailer) growth rate, Privilege Club contribution, critical retailer contribution,
network expansion planning, clustering, sales planning
Business challenges
 Not able to take informed decisions and corrective actions; currently downloading and
massaging data, a very long manual process
Process innovations
• Real-time sales visibility
Contribution of SAP HANA
 SAP HANA will tie together multiple data sets and enable full granularity of insights
Value drivers/KPIs
 Revenue

Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation
sessions and may not be completely validated.
Chemical manufacturer – SAP NetWeaver BW on SAP HANA
Chemicals
Business context and goals
 Ability to report globally in real time; current reporting infrastructure provides inventory positions
lagging ERP by 1 day
Business challenges
 Inability to effect planning changes, transfer orders, and see effects in real-time inventory
position reports
Process innovations
• Access real-time supply chain and sales with better visibility into planned and actual demand
information across product, channel, and geography dimensions at the most granular level. Use
what-if scenario modeling and analysis
Contribution of SAP HANA
 Real-time demand supply matching at multiple levels of supply chain; ability to report multiple
data feeds for supply and demand in real time
Value drivers/KPIs
 Real-time customer profitability reporting; ability to modify customer SLA based on profitability –
reduce inventory finished goods
Innovation scope
SAP HANA Platform (customer-specific)
E2E solution
Chemicals – integrated sales and
operations planning
Value potential 3
Feasibility 5
Low High
1 5
Low High
1 5

Innovating our business with real-time information
After a successful proof of concept, we have quickly made the decision to implement SAP CRM
powered by SAP HANA. We believe this is the right move for Bayer as it will allow us to innovate
the way products are being developed by focusing more on the individuals requirements rather than
generic markets. We will also create a better user experience by providing our users with real-time
information while reducing our overall operating cost in IT. The next logical step for Bayer will be to
move the whole SAP Business Suite to SAP HANA.
Kurt De Ruwe, CIO, Bayer MaterialScience
AT A GLANCE
Objective
Proof of concept
Solution
SAP Customer Relationship Management (SAP CRM) application
powered by SAP HANA
Benefits
Innovate the business and empower users with real-time information

Delivering Real-Time Business Value for Chemicals

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