SDM E brief information 2016

.consulting .solutions .partnership
Short information
SAP Dairy Management by msg

© msg | 2016 | SAP Dairy Management by msg 2
Welcome to msg

Partnership SAP und msg
msg systems as long-standing & successful SAP partner
• Develop the industry standard for dairy industry
• Founded in 1980
• More than 5,500 employees
• More than 600 SAP developers
• Headquarter in Munich, Germany
• Located in 24 countries
• 727 million euros turnover in 2015
Internationale
Standorte
Ausgewählte
Projektstandorte
Standorte D-A-CH

4
msg group overview
Supported from strategic shareholdings and partners
© msg | 2016 | SAP Dairy Management by msg
A strong
company
group

Partnership msg and SAP
• Reinsurance solution
FS-RI (exclusively)
• Policy Management
solution FS-PM Auto
• Product server msg.PM
• Insurance Analyzer (IA)
• Health solution
FS-PM Health
• Industrial and Specialty
Lines FS-PM ISL
• SAP Dairy Management
by msg
• SAP Bank Analyzer ALM
Software Partner
• Primary Insurance Solution
CO-innovation Agreement
• Incentive Management
Solution FS-ICM
Development Partner
• SAP for Insurance
• SAP Data Warehousing
Validated Expertise
Partner
• All SAP for Insurance
Products and
Cross-Components
• All SAP Dairy
Management by msg
Products and
Cross-Components
• SAP NetWeaver ™
Test und Quality
Management
Consulting- and
Implementation-
Partner
Independent
Software Vendor
• msg.XDI (eXchange
Data Interface) powered
by SAP NetWeaver™
• msg.PIA Primary
Insurance Application
• msg.LRM Life
Reinsurance Module
• msg.PUMA Professional
Underwriting Mgmt.
Application
• msg.Reporting for
Reinsurance
• Cooperation since 1998
• Co-Innovation Partner Development Agreement between msg and SAP since 07/2011
• VAR Partnership in different countries

SAP Dairy
Costing
Partnership msg and GKC
• Since 28 years dairy business
consulting
• Development and implementation of
the dairy specific Felix applications
• Experience in integration of the Felix
Solution with SAP
• Dairy experts
• Strategic development partner
from GKC
• Since 30 years sw. development
• More than 600 SAP developer
• SAP development laboratory
• Strategic development and consulting
partner of SAP
SAP Dairy
Plant Operations
SAP Dairy
Production Planning
msg and GKC bundle their competencies for the development of
SAP Dairy Management by msg based on FELIX4 (predecessor)

Designed for the special requirements of the dairy industry in
planning and controlling
The milk market has a very volatile behavior. Minor variations
in the supply and demand lead to big alterations in the price of
milk-based raw materials. This often involves changes in the
production program, the product costs and profits and the
distribution margins.
Tested solutions for all dairy areas have been found, from milk
reception up to the finished product:
• Collection and reception of milk
• Milk processing
• Production, packing, stocking
• Cheese (hard, sliced, soft)
• Drinking milk, cream, butter
• Yoghurt, dessert, ice cream
• Powder, whey
• Ingredients
• Quark
The milk, as raw material, is the focus of attention in the
procurement process, along the different processing stages up to
the profit on finished product for the client:
• Raw material type (raw milk, organic milk, regional milk)
• Concentrate, filtrate
• Raw material contents (fat, protein, casein, lactose, along all
levels)
• Co-product / by-product
• Semi-finished product
• Differentiated origin and prices
• Raw material evaluation
• Raw material ingredient evaluation
Flexible planning and controlling systems provide strategic
meaning for the management and steering of the company.
SAP Dairy Management by msg focuses on the requirements
of the dairy industry and is based on long practical experience.

Highest level of product integration
The milk market has a very volatile behavior. Minor variations
in the supply and demand lead to big alterations in the price of
milk-based raw materials. This often involves changes in the
production program, the product costs and profits and the
distribution margins.
Flexible planning and controlling systems provide strategic
meaning for the management and steering of the company.
SAP Dairy Management by msg focuses on the requirements
of the dairy industry and is based on long practical experience.
• Seamless integration within SAP landscapes
• Highest level of product qualification,
tested to meet stringent SAP product standards:
− Usability – harmonized look-and-feel
− Application and interface integration
− Functional correctness – proven with SAP technology
• Long term solution with additional business value
− Complements Customer’s SAP investments
− Aligned with future SAP direction and roadmap
• Same support and maintenance applies:
− No maintenance risk – SAP responsible for
customer support, service packs and upgrades
− No finger pointing – Single point of contact: SAP

Supports cost-reduction and efficiency improvement:
Small numbers, big effects
*) Saving potential will depend on the production program, the technical equipment and any measures that have been already taken.
How much is the benefit of a reduction of 0.2% in raw material costs and material costs?
... and the benefit of an efficiency increase of cost-pushing processes by 2% per year?
Losses and disturbances are
transparent immediately,
implement measures
Transparent costs, results
potentials and targets
Increase efficiency, prevent
losses, through more
accurate planning
SAP Dairy
Plant Operations
SAP Dairy
Production Planning
• Flexible production- and
raw material planning
• in all production areas
Daily-department-controlling
• Raw material, ingredients,
• Material, services
• Dairy process costs
• Contribution margins
• Raw material utilization
SAP Dairy Management by msg supports: the identification of potential improvements
and the implementation of measures to make use of them
SAP Dairy
Costing
Dairy Factory
1 billion kg
raw material
~ 1 – 2 Mio. $/Year*

Participate in future innovations in SAP
ERP and SAP Business Suite
Functional Overview
Participate in future innovations in SAP
Dairy Management by msg
• Activity-based costing and statement of
financial performance
• Consistent quantity statements in line with
value calculations
• Logistics cost calculations
• Sales and contribution margin statement
• Monthly / yearly financial forecast
• Actual / target costs
• Financial forecast simulation
4
5
SAPERP
Dairy
Plant
Operations
Dairy
Costing
Dairy
Raw Milk
Procurement
Dairy
Production
Planning
Procurement
Production
Planning &
Execution
Materials
Management
Quality
Management
Enterprise
Asset
Management
Project
Systems
…
Controlling
1 2 3
4
5
3
• Rolling planning of several weeks
• Daily planning
• Production order scheduling
• Raw material planning
1
• Raw material receipt
• Raw material balance
• Yield
• Performance
• Personnel efficiency
2

Production Planning
ERP-Integration
All necessary data, such as current customer orders, special sales offers,
historical sales, inventory and production data is provided by the SAP-
ERP-System. This will serve as planning proposal for the production
planner. After releasing the plan, all relevant data will be transferred to
the ERP-System.
Raw materials with their ingredients in focus
Dairy Production Planning is specially adapted for milk-based raw
materials, semi-finished products, co-products and dairy products with
their respective nutritional content (fat, protein, casein, lactose, minerals,
etc.)
Immediate and independent planning update
Changes in planning are flexibly updated immediately.
Dairy is fully integrated with SAP-ERP. However, planning takes place
without instantaneous effect in the SAP-ERP-System.
Integrated planning of raw materials with their ingredients
Raw material needs, surpluses, purchases and sales at factory level are
centralized at company level for a global material requirement planning.
The planer has therefore a comprehensive real-time overview of the
impact on raw materials, capacities, etc. Milk requirements and milk
receipts are the basis to create a milk-balance-sheet that will help plan
the coming purchase and sales quantities.
Flexible planning periods
Planning periods are flexible and are available in rolling months, weeks
or days.
Dairy Planning targets a series of positive business effects. These are
not only cost-saving effects but also general improvements in the
production processes.
Mon Tue Wed Thu Fri Sat Sun
Short term planning W
25
W
24
W
23
W
26
Milk
reception
Dairy Production Planning focuses on the specific requirements of the
different planning areas of the dairy industry. It considers the
particularities of:
• Planning of cheese
• Planning of fresh products
• Planning of dry products (powder)
• Planning of whey products
• Reception and utilization of milk raw materials
• Planning across various factories

*MES: Manufacturing Execution System
Plant Operations
ERP-Integration
All Master Data such as materials, BOM are integrated from ERP
system. In addition Dairy Plant Operations can integrate SAP MM
movements of materials as well as provide dairy specific material
movements (e.g. ingredients) back to SAP MM - following the
philosophy to unburden ERP from dairy industry specific issues.
Raw material- and material controlling
shows losses and efficiency reserves, initiated and supported by
measures to enhance the cost.
Continuous raw material and ingredients settlement from reception to
the finished product divided in:
• Raw material types (conventional, organic, regional)
• Ingredients (fat, protein, casein, lactose, mineral etc.)
For all dairy departments, cheese factories, ingredients, ice cream etc.
there exist proven methods:
• Raw material-/ingredients balance, utilization and exploitation
• Department target-actual-comparison (exploitation, KPI’s, losses)
• Batch (for raw material, SF- and co-products) and Production
quantity controlling
Facility performance controlling determines efficiency reserves and
provides starting points for improvements in the production and
logistics. For processes (start up, production, switching, cleaning,
picking and packing, loading of goods, etc.) targets are determined
and compared to the actual-times. For the evaluation and analysis of
the departments are available:
• OEE, facility- and work performance rates
• Failure times, target-actual-comparison, KPI’s
Key Performance Indicators (KPI’s)
Dairy Plant Operations provides relevant indicators to improve
operational efficiency.
The high costs of raw materials (milk-based or not), processes and
facilities require an effective daily controlling on raw material
procurement, production up to warehouse management in the production
departments.
Dairy Plant Operations supports the daily controlling and batch
controlling in terms of milk raw materials, direct materials, facilities and
services. It is prepared for the adoption of relevant data from the MES*.
Dairy Plant Operations allows controlling calculations at department
level, factory level or even for a group of factories either individually or as
a total and it is able to perform it on a daily, weekly or monthly basis. The
calculations can be carried out several times.
SAP Dairy Plant Operations enables a comprehensive and period based
management of ingredients with functional integration to SAP MM.
Actual vs. target at company level
Milk reception Milk utilization Actual vs. target at dept. level
Production line performanceMilk balance
Key Performance Indicators

Costing
Contribution margin statement by customer / product
For each customer-product item a progressive full cost P&L statement with
distinct contribution margin levels is created. In each case, (raw material)
price, utilization, quantity and process variances as well as plan and target
variances to actual results are reported.
Calculation periods, simulation
With each calculation run, quantities, processes, costs, cost rates and CM’s
are determined anew with complete cost allocation.
• Plan results (month, year, simulation)
• Target vs. actual results (month)
Primary costs and quantity calculation
Raw material, ingredients, material, personnel, energy, maintenance,
depreciations etc. are carried over cost centers, semi-finished products,
inventory, finished products and are revealed at the level of customer /
product.
ERP integration
SAP Dairy Costing is integrated with SAP modules FI, CO-OM, CO-PA, MM
and SD. Results are distinctively transferred back to CO-OM, CO-PA and MM.
Dairy costing was developed as a separate settlement area but also fully
integrated solution for SAP ERP systems. Specially designed for the dairy
industry in order to quickly provide correct and accurate information.
Raw material, material and process quantity calculation
Dairy Costing includes drill-down functionalities for finished, semi-finished and
by-product quantities in terms of raw material, ingredient and material
composition as well as process quantities and resources consumed (staff,
electricity, steam, etc.). Volume-, batch-, daily variable and fixed costs are
differentiated.
Activity-based costing
Services rendered by cost centers can be assigned exactly to different
processes (start up, switching, cleaning, daily closing etc.). Process cost rates
are generated automatically in each calculation run, so that all cost center costs
are always fully allocated.
Activity-based costing for logistics and sales
Logistic, sales and administrative services, such as order processing,
transportation, etc. can be charged according to the method of activity-based
costing or traditional cost center accounting into the contribution margin
statement by customer / product.
Cost center
Processes
Cost rate
Raw
Material
Material
SF
Material
SF FP
Primary
Main cost center
Sales
Revenue
var HK / WE
Logistics
DB I
Fix HK
DB II
Distribution
DB III
Administration
DB IV
Customer / Product
Secondary
Auxiliary cost center
Primary
Secondary
Secondary
Primary
Secondary
Cost rate
Processes Processes

Benefits
Dairy
Plant
Operations
Dairy
Costing
Dairy
Raw Milk
Procurement
Dairy
Production
Planning
1 2 3
• Planned quantity calculation,
cost accounting & profitability analysis
• Simulation planning accounting with
overall result effects
• Raw material cost
and raw material utilization accounting
• Product optimization
by accurate costs for small batches
• Data base / Repository
for product value analysis
• Customer / Product
result assessment
• Process optimization
by awareness of process costs
• Increase of cost-efficiency
by adherence of the specifications for
plan / target
• Dairy-specific variance analysis
3
• Cross-Plant Planning
of raw material receipt and usage
• Raw Material Balancing
Improvement of raw material utilization
• Lot Size Planning
scrap reduction to start-up & shut-down
• Tranquillization
of the production processes
• Transparency
for the people being involved in the
processes
1
• Improve company loss factor
(raw materials)
• Improve material efficiency
vs. net target consumption
• Improve milk input
and the yield
• Control small batches
for raw material, semi-finished products,
finished products and by-products
• Increase equipment efficiency
(OEE)
• Increase Labor efficiency
and rate performance
• Profitability Analysis
Capture raw material costs and
expenses
2

SAP Dairy Industry Roadmap
DAIRY Costing
DAIRY Operations
DAIRY Planning
DAIRY Sales Planning
DAIRY Production Planning
DAIRY Raw Material Planning
DAIRY Raw Material Controlling
DAIRY Performance Controlling
DAIRY Statement of fin. performance
DAIRY Activity based Costing
Continuous Improvements
(Planning, Operations, Costing)
S/4HANA (edition)
Fiori UI Cloud
Mobile Internet of Things
Transportation Integration
(enablement of SAP TM)
Plant Maintenance Integration
(enablement of SAP PM / EAM)
Milk Settlement & Payment
(enhanced pricing conditions )
Milk Collection
(enhancement for Farmer & Truck batches)
Farmer Portal
(incl. receipt, QM, payment, … information)
APO enablement
(Planned Order Synchronization)
Material Ledger enablement
(via production orders)
Affinage Operation
(cheese ripening operations)
Affinage Planning
(cheese ripening planning / analytics)
Catch Weight Mgmt. enablement
(parallel UoM in Material Movements )
Simple Finance
(sFIN add-on enablement )
Continuous Improvements
(Planning, Operations, Costing)
Solution Today Planned Innovations
Dairy
Management
by msg 3.0
Future Direction
Dairy
Management
by msg 4.0

Proposed next steps
• Conduct case study /
proof-of-concept for SAP Dairy Management
by msg
• Fit Gap Analysis
• Value / ROI-Assessment
• Definition of the next innovation
steps for SAP Dairy Management by msg
Vision: Create an International Dairy Standard
based on
• 25 years business experience in Dairy Industry by
msg and SAP
• International Business Requirements of international
leading dairy companies
(i.e. Emmi, DMK, etc.)

The Dairy Industry Ecosystem
From Cow to Consumer
Buy Make Sell
Research &
Development
Enterprise Asset
Management
Quality Sustainability
Financials Controlling HR …
Sourcing Track & Trace Transport Store
Channel /
Retail
3rd. Party LogisticsCo Manufacturing
Supplier Colla-borate Colla-
borate

The Dairy Industry Ecosystem
Dairy Specific Requirements
Buy Make Sell
Research &
Development
Enterprise Asset
Management
Quality Sustainability
Financials Controlling HR …
Sourcing Track & Trace Transport Store
Channel /
Retail
3rd. Party LogisticsCo Manufacturing
Supplier Colla-borate Colla-
borate
Batch
Traceability
Shelf life Catch Weight Vendor
managed
Inventory
Returns &
Complaints
Raw Material
Efficiency
Dairy
Production
Planning
Raw milk
procurement
& settlement
Decrease of finished
product waste (due to
short BBD)
Asset
Maintenance
Recipe
Management
Inventory
Balancing
Cheese
Ripening
Commodity
Pricing
Equipment
Efficiency
Labor
Efficiency
C02
Footprint

Integration overview
• SAP Dairy Management by msg supports several SAP ERP integration scenarios and makes use, in its complete scope, of the
master data available in the core SAP ERP module.
• The dynamic integration with the SAP ERP module takes place depending on the chosen scenarios and on its functional
particularities.
• The integration parameters are determined without requiring a high workload regarding setting adjustment.
• The booking data is executed in both directions though job planning and so, offers highest flexibility.
• The integration guarantees full flexibility in the mapping of all structures of the dairy industry in SAP Dairy and the subsequent
further processing in SAP ERP.
MM PP-PI
SAP Dairy Modul II
Plant operations
(Raw materials, lines, energy)
SAP MM
• Article master data
• Stocks
• Consumptions, etc.
SAP PP-PI
• Bill of Materials
• Process order
• etc.
SAP SD
• Client master data
• Conditions
• Orders
SAP FI/CO
• Account master data
• Cost centers
• Costs
SAP Dairy Modul I
Production planning and raw material
planning
SAP Dairy Modul III
Process costing and activity costing
SAP APO SAP ML

Integration into SAP Dairy Management by msg
SAP Material Management
• Material master data
• Bill of materials
• Production version
• Goods movements
SAP Production / Process
Work center / Work plan
• Resources, Recipes
• Production orders
• Process orders
• Confirmations
SAP Logistics
• Deliveries
• Promotions
• Sales orders
• Conditions
SAP Controlling
• Cost center master data
• Master data for internal orders
• Overhead cost planning
• Plan Vs. Actual postings
• Currencies
SAP Results- and
Market segment calculation
• Characteristics,
• Value fields
• Characteristic derivation
• Profitability analysis
transfer structure
• Plan/Actual postings
• Conditions
SAP Company structure
• Company code
• Controlling area data
• Results data
• Units
DAIRY
Plant
Operations
DAIRY
Costing
DAIRY
Planning

Integration from SAP Dairy Management by msg
• Control data allow a flexible adaptation based on the customer’ situation, without neglecting the special requirements of the dairy
industry.
• The control takes place in existing parameters, which represent control parameters in the corresponding modules. For example: the
“Material type” in Material Management.
SAP Controlling
• Fixed and variable costs
• Allocations for plan/actual data
SAP Results and
Market segment calculation
Customer/Product
• Production costs
• Marketing and
sales costs
SAP Material Management
• Material price, future
• Movements of goods
SAP Production / Process
• Plan orders
SAP Logistics
• Standard orders
• Raw material sales
SAP Purchasing
• Purchase requisition
• Raw material requirements
• Material requirements
• Intercompany balancing
DAIRY
Plant
Operations
DAIRY
Costing
DAIRY
Planning

Integrated Architecture (ERP Add-On)
SAP ERP
SAP Dairy – Integration Layer
SAP Dairy – Integrated Data Model
SAP Dairy – Business Logic
SAP Dairy – UI (Web Dynpro ABAP)
Adapter
MM
Adapter
PP-PI
Adapter
SD
SAP
MM
SAP
PP-PI
SAP
SD
SAP Dairy – Data
Functional model where data from different
sources are integrated (e.g. „material“ with
attribute „planned sales volume“)
Aggregated, redundant data from SAP ERP or
SAP Dairy, e.g. historical sales per calendar
week
SAP Dairy - specific data, e.g. planned sales
volume
SD-specific data, e.g. sales documents
MM-specific data, e.g. information on
material
Cubes Daten
1
2 3
4 5
1
2
3
4
5

.consulting .solutions .partnership
msg systems ag
Robert-Buerkle-Str. 1
85737 Ismaning/Munich
Germany
Phone: +49 89 96101-0
Fax: +49 89 96101-1113
info@msg-systems.com
www.msg-systems.com

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