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GLOBAL TRADE MANAGEMENT ..................................................................................................................... 2 1.1 MAIN PROCESS ....................................................................................................................................... 2 1.1.1 Trading Contract Management .................................................................................................... 2 1.1.2 Expense Management ................................................................................................................. 2 1.1.3 Trading Execution Management ................................................................................................. 2 1.1.4 Position Management .................................................................................................................. 3 1.1.5 Risk Management......................................................................................................................... 3 1.2 BUSINESS SCENARIO MAPS .................................................................................................................... 3 1.2.1 Global Trade Management: Association Process ...................................................................... 3 Description ............................................................................................................................................................... 3 1.2.1.1 Create trading contract (purchase-sided) .............................................................................................. 6 1.2.1.2 Create trading contract (sales-sided) ..................................................................................................... 6 1.2.1.3 Association .............................................................................................................................................. 6 1.2.1.4 Plan expenses ......................................................................................................................................... 6 1.2.1.5 Control profit and loss ............................................................................................................................. 6 1.2.1.6 Initiate currency hedging ........................................................................................................................ 6 1.2.1.7 Hedge currency ....................................................................................................................................... 6 1.2.1.8 Cash flow planning.................................................................................................................................. 6 1.2.1.9 Create sales order and purchase order ................................................................................................. 6 1.2.2 Global Trade Management: Back-to-Back Trading Process ..................................................... 7 Description ............................................................................................................................................................... 7 1.2.2.1 Create trading contract (back-to-back) .................................................................................................. 8 1.2.2.2 Plan expenses ......................................................................................................................................... 8 1.2.2.3 Control profit and loss ............................................................................................................................. 9 1.2.2.4 Create sales order and purchase order ................................................................................................. 9 1.2.3 Global Trade Management: Long Position Trading Process .................................................... 9 Description ............................................................................................................................................................... 9 Hedge currency ....................................................................................................................................................... 11 1.2.3.1 Hedge commodity ................................................................................................................................. 11 1.2.3.2 Create purchase order .......................................................................................................................... 11 1.2.4 Global Trade Management: Short Position Trading Process .................................................. 11 Description ............................................................................................................................................................. 11 1.2.4.1 Create sales order................................................................................................................................. 12Prepare by – Sudarshan Phatak +91 8007011199

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Global Trade Management1.1 Main ProcessCovers all the logistics processes required by trading companies. Combines and controls all the usualpurchase and sales processes from a trading perspective. Enables users to plan and control profits foreach deal more accurately. Leads to a considerable reduction in costs due to fewer automated processsteps. Offers potential savings, which means that implementing Global Trade Management (GTM) pays offquickly. Lets management use informative reports as a reliable basis for any decision to be made.Provides a clear advantage over the competition with SAP by integrating logistics, treasury, and finance,an advantage that will be increased when additional developments are made in the areas of reporting andcommodity hedging.1.1.1 Trading Contract ManagementPROCESS FEATURE Integrates information from purchasing and sales seamlessly. Uses the main document as the trading contract, which forms the basis of all purchasing, sales, and expense processes and provides users with a clear overview of all business transactions. Allows companies to use the trading contract to perform a profitability simulation immediately as it takes account of purchasing prices, sales prices andComments planned expenses. Supports both back-to-back transactions and one-sided purchasing and sales transactions using the unique trading contract. Lets users pinpoint commodity risks at any given time via the option to evaluate one-sided purchasing transactions. Lets users trade with vendors and customers via the Internet using the Web-based trading contract, thus speeding up the entire process.1.1.2 Expense ManagementPROCESS FEATURE Uses the trading contract to estimate costs in trading incurred through storage, shipping, freight, insurance, and customs, and then compares the planned costs with the actual costs that arise. Lets users distribute costs in the ensuing settlement ofComments actual costs to several different transactions, depending on the origin of the costs. Allows companies to make informed statements regarding profits as a result of this classified assignment of expenses.1.1.3 Trading Execution ManagementPROCESS FEATURE Provides a unique form of trading execution management that helps traders to control and monitor all logistics processes, whether import or export processes, stock shipments, or drop shipments. Defines these processes in a flexible manner and then makes them available, as standard, throughout the company. Allows a set sequenceComments of process steps to ensure that the necessary letters of credit have been created before a sale is entered, for example. Automates and shortens traditional logistics processes by up to 60%. Lets users post deliveries, goods issues, and billing documents for several contract items in one single step.

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1.1.4 Position ManagementPROCESS FEATURE Lets users associate material quantities with single-sided purchase and sales contracts on an item level with GTM‘s Position Management. Supports multiple relationships between purchases and sales, e.g., associates one purchase order withComments multiple sales orders. Gives the company the information it needs for long/short analysis in risk management. Links purchasing contracts and sales contracts at an early stage to reduce possible commodity risks, while increasing the reliability of delivery promises.1.1.5 Risk ManagementPROCESS FEATURE Adds Treasury and Risk Management, a component of Financial Supply Chain Management, to ensure that currency risks are completely hedged. Requires noComments manual involvement to make changes to quantities; values, or deadlines in a deal, and makes all future cash flows immediately visible in financial planning.1.2 Business Scenario Maps Global Trade Management: Association Process Global Trade Management: Back-to-Back Trading Process Global Trade Management: Long Position Trading Process Global Trade Management: Short Position Trading Process1.2.1 Global Trade Management: Association ProcessBUSINESS SCENARIO MAPDescription Global Trade Management (GTM) covers all the logistics processes required by trading companies. All the usual purchase and sales processes are combined and controlled from a trading perspective. The association process is characterized by one-sided Trading Contracts, having either vendors delivering one or more customers, which are not known when the deal is contracted (long position) or customers delivered by one or more vendors, which are not known when the deal is contracted (short position). A later association ofSummary sales-sided with purchase-sided contracts is required. The main concern of this process is to find matching material-vendor-combinations also in regard of other properties, such as quality, region, trading responsibility and so on. Further more the postponed fulfillment very often requires the hedging of currencies. The Position Management of GTM allows the association of material quantities between one-sided contracts on an item level to a later time. With a linkage to the

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Transaction Manager of FSCM currency hedging in form of micro or macro hedging is available. Forward contracts can be created with a link to the logistic contracts. A fully integration to accounting and financial processes, such as actual cash flow, is guaranteed. This gives you the information you need for long/short analysis in risk management GTM enables you to plan and control profits for each deal more accurately. Fewer automated process steps lead to a considerable reduction in costs. Potential savings mean that implementing GTM pays off quickly. Management can use informative reports as a reliable basis for any decision to be made. By integrating logistics,Comments treasury and finance, SAP offers you a clear advantage over the competition, an advantage that will be increased when additional developments are made in the areas of reporting and commodity hedging. The scope of functionality includes Trading Contract Management, Expense Management, Trading Execution Management, Position Management and Risk Management.

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1.2.1.1 Create trading contract (purchase-sided)SAP GTM supports the trading contract, a leading document that links purchasing, sales, and expenses.You can enter all information in a single user interface, with flexible status and workflow management. Youcan capture back-to-back contracts as well as single-sided purchasing or sales contracts. From the tradingcontract, you can create subordinate documents according to your supply chain processes.1.2.1.2 Create trading contract (sales-sided)SAP GTM supports the trading contract, a leading document that links purchasing, sales, and expenses.You can enter all information in a single user interface, with flexible status and workflow management. Youcan capture back-to-back contracts as well as single-sided purchasing or sales contracts. From the tradingcontract, you can create subordinate documents according to your supply chain processes1.2.1.3 AssociationWith GTM’s Position Management, you can associate material quantities with single-sided purchase andsales contracts on an item level. The solution also supports multiple relationships between purchases andsales. For example, you can associate one purchase order with multiple sales orders. This gives you theinformation you need for long/short analysis in risk management. Linking purchasing contracts and salescontracts at an early stage reduces possible commodity risks, while increasing the reliability of deliverypromises.1.2.1.4 Plan expensesSAP GTM unifies management of expenses such as freight, customs insurance, and banking chargesacross applications. You can allocate expenses to a single contract or distribute them across multiplecontracts. You get a clear picture of planned, unplanned, and settled expenses, so you can see the impactof expenses throughout a deals life cycle.1.2.1.5 Control profit and lossThe main document is the trading contract. This forms the basis of all purchasing, sales and expenseprocesses and provides you with a clear overview of all business transactions. As it takes account ofpurchasing prices, sales prices and planned expenses, the trading contract allows you to perform aprofitability simulation immediately.1.2.1.6 Initiate currency hedgingTransactions created in trading contracts can be hedged in order to eliminate or at least minimize the riskrelated to volatile currency markets. The close link between the logistical transaction in the trading contractand the financial transaction in the FSCM Treasury & Risk Management makes sure that risks are undercontrol even if quantities, values and deadlines are changing.1.2.1.7 Hedge currencyCurrency hedging tightly integrates the trading contract in logistics with currency hedging in financials.Hedges can be automatically created whenever a foreign currency is used in a trading contract and arekept up to date when quantities, values or deadlines of a deal are changed. The creation of hedges can belimited to certain currencies or amounts exceeding a threshold.1.2.1.8 Cash flow planningAll hedging information is available immediately for cash flow planning and accounting (investment of liquidfunds, financing of planned investments).1.2.1.9 Create sales order and purchase orderWith SAP GTM, you have control over supply chain processes. You can use predefined processes ormodel your own processes. Modeled processes contain standardized process steps such as purchase andsales orders, inbound and outbound deliveries, and invoice and billing documents. These processes canbe automated, avoiding manual steps and reducing costs.

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1.2.2 Global Trade Management: Back-to-Back Trading ProcessBUSINESS SCENARIO MAPDescription Trading Companies are basically huge business coordinators - they connect suppliers with customers, then take percentage of the contract value from both sides as a commission/finder’s fee. Essentially, trading companies make their profits by facilitating transactions between companies. One main / core process is the back-to- back business, which is when we have a known customer and vendor when the dealSummary is contracted. Global Trade Management supports this business with a new contract management. Key object is the Trading Contract, a new document including purchase and sales information. GTM enables you to plan and control profits for each deal more accurately. Fewer automated process steps lead to a considerable reduction in costs. Potential savings mean that implementing GTM pays off quickly. Management can use informative reports as a reliable basis for any decision to be made. By integrating logistics,Comments treasury and finance, SAP offers you a clear advantage over the competition, an advantage that will be increased when additional developments are made in the areas of reporting and commodity hedging. The scope of functionality includes Trading Contract Management, Expense Management, Trading Execution Management, Position Management and Risk Management.Global Trade Management: Back-to-Back Trading Process

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1.2.2.1 Create trading contract (back-to-back)ACTIVITYSAP GTM supports the trading contract, a leading document that links purchasing, sales, and expenses.You can enter all information in a single user interface, with flexible status and workflow management. Youcan capture back-to-back contracts as well as single-sided purchasing or sales contracts. From the tradingcontract, you can create subordinate documents according to your supply chain processes.1.2.2.2 Plan expensesACTIVITY

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SAP GTM unifies management of expenses such as freight, customs insurance, and banking chargesacross applications. You can allocate expenses to a single contract or distribute them across multiplecontracts. You get a clear picture of planned, unplanned, and settled expenses, so you can see the impactof expenses throughout a deals life cycle.1.2.2.3 Control profit and lossACTIVITYThe main document is the trading contract. This forms the basis of all purchasing, sales and expenseprocesses and provides you with a clear overview of all business transactions. As it takes account ofpurchasing prices, sales prices and planned expenses, the trading contract allows you to perform aprofitability simulation immediately.1.2.2.4 Create sales order and purchase orderACTIVITYWith SAP GTM, you have control over supply chain processes. You can use predefined processes ormodel your own processes. Modeled processes contain standardized process steps such as purchase andsales orders, inbound and outbound deliveries, and invoice and billing documents. These processes canbe automated, avoiding manual steps and reducing costs.1.2.3 Global Trade Management: Long Position Trading ProcessDescription Global Trade Management (GTM) covers all the logistics processes required by trading companies. All the usual purchase and sales processes are combined and controlled from a trading perspective. The business scenario of long positions is characterized by purchase-sided Trading Contracts, having one vendor delivering one or more customers, which are not known when the deal is contracted (long position). A later association of sales-sided contracts is required. The main concern of this process is to find matching material- vendor-combinations also in regard of other properties, such as quality, region,Summary trading responsibility and so on. Furthermore the postponed fulfillment very often requires the hedging of currencies. The Position Management, described in the process above allows the linkage between one-sided contracts to a later time. With a linkage to the Transaction Manager of FSCM currency hedging in form of micro or macro hedging is available. Forward contracts can be created with a link to the logistic contracts. A fully integration to accounting and financial processes, such as actual cash flow, is guaranteed. GTM enables you to plan and control profits for each deal more accurately. Fewer automated process steps lead to a considerable reduction in costs. Potential savings mean that implementing GTM pays off quickly. Management can use informative reports as a reliable basis for any decision to be made. By integrating logistics,Comments treasury and finance, SAP offers you a clear advantage over the competition, an advantage that will be increased when additional developments are made in the areas of reporting and commodity hedging. The scope of functionality includes Trading Contract Management, Expense Management, Trading Execution Management, Position Management and Risk Management.

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BUSINESS SCENARIO MAP

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Hedge currency Currency hedging tightly integrates the trading contract in logistics with currency hedging in financials.Hedges can be automatically created whenever a foreign currency is used in a trading contract and arekept up to date when quantities, values or deadlines of a deal are changed. The creation of hedges can belimited to certain currencies or amounts exceeding a threshold.1.2.3.1 Hedge commodityCommodity Futures are bought or sold at the commodity specific exchanges in order to compensate themovements in the markets. The distinct products traded in the Trading Contract are mapped against thegeneric products traded in the exchanges. The decision to buy or sell Commodity Futures is made in theanalytical risk management component of GTM within SAP Business Intelligence. The execution of thetransaction is made in FSCM Treasury & Risk Management. It is not planned to support a physicalsettlement of futures, so they must be always set off before maturity.1.2.3.2 Create purchase order With SAP GTM, you have control over supply chain processes. You can use predefined processes ormodel your own processes. Modeled processes contain standardized process steps such as purchase andsales orders, inbound and outbound deliveries, and invoice and billing documents. These processes canbe automated, avoiding manual steps and reducing costs.1.2.4 Global Trade Management: Short Position Trading ProcessBUSINESS SCENARIO MAPDescription Global Trade Management (GTM) covers all the logistics processes required by trading companies. All the usual purchase and sales processes are combined and controlled from a trading perspective. The business scenario of short positions is characterized by sales-sided Trading Contracts having one customer delivered by one or more vendors, which are not known when the deal is contracted (short position). A later association of purchase-Summary sided contracts is required. The main concern of this process is to find matching material-vendor-combinations also in regard of other properties, such as quality, region, trading responsibility and so on. The comprehensive Position Management of GTM enables you to link not only one- sided trading contracts but also their follow-on documents by its Association Management. Using the Portfolio Management, another part of the Position Management, the properties of the association can be defined at item level. GTM enables you to plan and control profits for each deal more accurately. Fewer automated process steps lead to a considerable reduction in costs. Potential savings mean that implementing GTM pays off quickly. Management can use informative reports as a reliable basis for any decision to be made. By integrating logistics, treasuryComments and finance, SAP offers you a clear advantage over the competition, an advantage that will be increased when additional developments are made in the areas of reporting and commodity hedging. The scope of functionality includes Trading Contract Management, Expense Management, Trading Execution Management, Position Management and Risk Management.

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BUSINESS SCENARIO MAP1.2.4.1 Create sales orderACTIVITY With SAP GTM, you have control over supply chain processes. You can use predefined processes ormodel your own processes. Modeled processes contain standardized process steps such as purchase andsales orders, inbound and outbound deliveries, and invoice and billing documents. These processes canbe automated, avoiding manual steps and reducing costs.

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