Customer Presentation - Packaged Solution for the Dairy Industry by g820Y0

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									SAP™ ERP for the Dairy
Industry
Deepak Sharma
MD, SAPINDUS SOFTWARE PVT Ltd.
Challenges, Strategies, and Benefits
The Solution
Challenges, Strategies, and Benefits
The Solution
 The Dairy Industry Ecosystem




Farmer                     Tank                        Dairy                           Retailer
                 Collect
                Raw Milk
                           Truck
                                                    Production        Distr. Centers
                Raw Material, Packaging, Service                       Wholesaler
Supplier
                Add. Purchase of Raw Material / Raw Milk                 Broker
 Dairy
                        Sell Raw Material and Ingredients


   Cooperatives                          Authorities             External Laboratories



 SAP AG 2006
 Dairy Companies Often Have
 the Right Focus and the Right Strategies…




  Protect and enhance revenue
            YOUR FOCUS                      Business STRATEGY

  Improve margins
      Increase Shareholder Value
  Drive for lower costs
 Increase Revenue and Profit Margins             YOUR FOCUS
  Get closer to the consumer
                                            Increase Shareholder Value
       Operational Excellence
  Improve time-to-market              Increase Revenue and Profit Margins
         Product Leadership
  Enhance operational efficiency              Cost Leadership
    Improve Customer Satisfaction             Product Leadership
                                         Improve Customer Satisfaction




 SAP AG 2006
 …But Mostly They Lack the Ability to Execute

 Often employees cannot execute the company’s business
 strategy because the business platform is …


  COMPLICATED TO OPERATE
   Complex and broken process flows     Business STRATEGY
   Incomplete or hidden information


  DIFFICULT TO CONTROL                      Business
   Lack of visibility                       Enabler
   Lack of traceability

  CHALLENGING TO CHANGE
                                         Ability to EXECUTE
   Multiple costly integration points
   Redundant and inconsistent data

A business enabler is required to
help the organization refocus on
business strategies!
 SAP AG 2006
 Market Forces and Business Needs


  Market Forces
   Retailer power (Wal-Mart effect)
   Consumer concerns about food safety;         Resulting Key Challenges
    media attention
                                                  Develop new products faster
   Increased legislation and regulations
    around food safety by FDA and other            and more effectively
    authorities (e.g., EU Dir. 178/2002,          Optimize supply chain
    the U.S. Bioterrorism Act of 2002)
   Changing consumer demands due to              Increase efficiency in
    demographics and trends                        procurement
   Shorter product life cycles
                                                  Optimize manufacturing
   Extreme price pressure and margin
    erosion                                       Ensure food safety and
   Restrictive consumer spending pattern          regulatory compliance
   Market consolidation (globalization, M&As)
                                                  Improve sales efficiency
   Increasing competition
   Emerging private labels
   New technologies reshaping the industry




 SAP AG 2006
     Develop New Products Faster and More Effectively
Challenges                                            Strategies
                     Adapt to ever-changing           Enable collaborative
                      consumer tastes and               engineering
                      requirements
                                                       Consolidate product
                     Develop product efficiently       development data and
                                                        documents
                     Address increased demands
                      for new products                 Reduce development effort
                                                        and time-to-market




SAP® can help you                                     Benefits
                     Integrate all product-related    Faster development by
                      information                       creating reusable product
                                                        specifications
                     Reduce data redundancy and
                      inconsistency                    Reduced time-to-market

                     Integrate into manufacturing     Ensured competitive
                      process                           advantage




     SAP AG 2006
     Optimize Supply Chain
Challenges                                              Strategies
                     Decrease process costs             Reduce costs

                     Create operational efficiencies    Streamline supply chain
                      and supply chain                    processes
                      transparency
                                                         Improve supply chain control
                     Manage shelf-life-based
                                                         Gain more supply chain
                      picking and distribution
                                                          visibility
                     Ensure accurate and timely
                      shipments
                     Avoid out-of-stocks



SAP® can help you                                       Benefits
                     Optimize distribution              Improved operations
                      processes                           excellence
                     Optimize end-to-end planning       Lower capital commitment

                     Improve asset utilization          Reduced operating costs

                     Fully integrate logistics          Higher customer satisfaction
                      management, including
                      transportation and warehouse
                      and inventory management
                     Shorten order-to-delivery
                      cycles

     SAP AG 2006
     Increase Efficiency in Procurement
Challenges                                              Strategies
                     Cope with ever-changing            Reduce costs
                      quantity and quality of the raw
                                                         Streamline processes
                      milk
                                                         Gain more visibility and
                     Manage complex payment
                                                          transparency
                      conditions
                                                         Improve relationship with
                     Cope with seasonal
                                                          producers
                      fluctuation
                     Create operational efficiencies
                      and transparency



SAP® can help you                                       Benefits
                     Set up integrated and flexible     Increased demand planning
                      processes for procurement           accuracy
                     Streamline raw milk collection     Consistent internal and
                      and reception                       external procurement
                                                          reporting
                     Ensure integrated quality
                      management                         Integrated processes

                     Track batches




     SAP AG 2006
     Optimize Manufacturing
Challenges                                              Strategies
                     Base plans on a non-               Maximize raw material
                      standardized raw material           utilization
                     Define optimal product mix         Increase demand planning
                                                          accuracy
                     Create operational efficiencies
                      and transparency                   Streamline processes

                     Optimize production                Gain more visibility and
                                                          transparency




SAP® can help you                                       Benefits
                     Set up integrated and flexible     Improved asset utilization
                      processes for manufacturing
                                                         Increased profitability of
                     Monitor raw material                produced product mix
                      utilization and losses
                                                         Consistent cross-stages
                     Ensure integrated quality           monitoring
                      management
                                                         Integrated processes
                     Track batches




     SAP AG 2006
     Ensure Food Safety and Regulatory Compliance
Challenges                                             Strategies
                     Align with governmental           Support mid- and long-term
                      regulations (EU 178/2002, the      company success by
                      U.S. Bioterrorism Act of 2002,     ensuring regulatory
                      import/export)                     compliance
                     Enable fast, effective product    Set efficient processes in
                      recalls                            place to enable traceability
                     Track and trace from “cow to      Allow targeted product recalls
                      consumer”                          to minimize costs




SAP® can help you                                      Benefits
                     Track, monitor, and trace         Reduced penalty risk
                      batches and inventory
                                                        Decreased risk of food-safety
                     Streamline procurement,            compensation payments
                      production, and sales
                                                        Reduced risk of bad
                     Manage sales returns               reputation
                     Enable targeted product           Lower operating costs
                      recalls




     SAP AG 2006
     Improve Sales Efficiency
Challenges                                             Strategies
                     Protect market share               Obtain first-hand information
                                                          about the market
                     Meet increased service level
                      expectations of customer           Optimize process settlement
                                                          in sales
                     Get visibility in the sales
                      process                            Increase customer service
                                                          offerings
                     Manage quality-based price
                      determination for raw material     Increase customer
                      sales                               satisfaction




SAP® can help you                                      Benefits
                     Plan, track, control, and          Higher sales volume
                      optimize sales performance
                                                         Better account retention
                     Expand service processes
                                                         Closer customer relationship
                     Strengthen collaboration with
                                                         Optimal sales force
                      partners and key customers
                                                          operation
                     Track indirect sales and
                                                         Higher customer satisfaction
                      customers
                     Ensure correct handling of
                      rebates


     SAP AG 2006
Challenges, Strategies, and Benefits
The Solution
             SAP ERP packaged solution for the dairy industry
                                                                  Description
                               … Focuses on key business processes that create a baseline for future growth
                               … Delivers immediate benefits by solving the need for system heterogeneity
                               … Enables significant business process automation


                              Analyze,
                                                                                                         Market              Deliver and
                              Plan, and              Procure             Manufacture
                                                                                                        and Sell              Service
                              Develop
                        Define business      Realize savings       Improve                   Improve marketing      Establish closer
Objectives
 Business




                         strategy and          in aggregate           manufacturing              effectiveness           contact with
                         goals                 purchasing             efficiency                                         customer
                                                                                                Increase sales
                        Understand           Improve               Ensure quality             effectiveness          Enhance control
                         company               purchasing             management in                                      over delivery
                         performance and       efficiency             manufacturing                                      process
                         profitability                                process
                                              Ensure tracking
                                               and traceability



                                                          Complete logistical and financial integration


                                                   Key Performance Indicators
                             Gross Profit/Total Net Sales                                Order Fulfillment Rate
                             Demand Forecast Accuracy                                    Raw Material Utilization and Losses
                             Inventory Turns                                             Warehousing/Distribution Costs


          SAP AG 2006
     SAP ERP packaged solution for the dairy industry
Suppliers &   Analyze, Plan & Develop           Procure               Manufacture               Market & Sell           Deliver & Service    Customers (e.g.
 Partners                                                                                                                                     Retailers) &
                                                                                                                                                Channel
                                                                                                                                                Partners
                        Sourcing & Procurement
                       Milk Procurement from Producer
                     Additional Raw Material Procurement
                                Procure to Stock
                             Internal Procurement
                      Product
                    Development
               Recipe Management                                    Manufacturing
                                                                   Dairy Production
                                                                       Planning
                                                                 Dairy Process Control


                                                                                                         Sell & Deliver
                                                                                                      Sales Order Processing
                                                                                                        Raw Material Sales
                                                                                                             Returns
                                                      Operational End-to-End Scenarios
                                                           Traceability & Food Safety
                                                             Inventory Management
                                                              Quality Management

                                                      Enterprise Management & Support
                                                                          Financials
                         Financial Accounting                      Cash Management                              Asset Management
                                                                      Controlling
               Standard Cost & Profit Center
                                                  Product Cost Planning         CO-PA for Consumer Products        Cost Object Controlling
                       Accounting


     SAP AG 2006
       Generic Food Scenarios
Suppliers &   Analyze, Plan & Develop          Procure               Manufacture               Market & Sell             Deliver & Service   Customers (e.g.
 Partners                                                                                                                                     Retailers) &
                                                                                                                                                Channel
                                                                                                                                                Partners
                       Sourcing & Procurement
                             Procure to Stock
                          Internal Procurement




                                                                                                        Sell & Deliver
                                                                                                     Sales Order Processing
                                                                                                               Returns


                                                     Operational End-to-End Scenarios
                                                          Traceability & Food Safety
                                                            Inventory Management
                                                             Quality Management

                                                     Enterprise Management & Support
                                                                         Financials
                        Financial Accounting                      Cash Management                              Asset Management
                                                                     Controlling
               Standard Cost & Profit Center
                                                 Product Cost Planning         CO-PA for Consumer Products        Cost Object Controlling
                       Accounting


     SAP AG 2006
         Procure to Stock
 Supports price comparison of vendors’ offers
                                                                                            Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                      Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                                    Partners


                                                                                                                      Sourcing & Procurement
                                                                                                                           Procure to Stock
                                                                                                                             Third Party
                                                                                                                                                       Plan &
                                                                                                                                                     Manufacture
                                                                                                                                                   Production Planning




 Provides tools to gain greater spend visibility in procurement
                                                                                                                                                       Production
                                                                                                                                                                                 Sell & Deliver
                                                                                                                                                                              Sales Order Processing
                                                                                                                                                                            Direct Store Delivery (DSD)
                                                                                                                                                                           Rebate & Bonus Management
                                                                                                                                                                                   Commissions
                                                                                                                                                                                   Indirect Sales
                                                                                                                                                                                      Returns
                                                                                                                                                                                Empties Processing
                                                                                                                                           Operational End-to-End Scenarios




 Helps to manage quotations, contracts, batch handling and quality
                                                                                                                                                  Inventory Management
                                                                                                                                                   Quality Management
                                                                                                                                                Traceability & Food Safety
                                                                                                                                               Cross Company Transactions
                                                                                                                                          Enterprise Management & Support
                                                                                                                                                 Financials & Controlling
                                                                                                                                               Excise Duty (Beverage) G65




     Industry Pain Points                                          Solution
        Improving purchasing activities efficiency                   Procurement of          Procurement –
        Realizing savings in purchased value                         Stock materials           Contracts

        Allowing visibility on vendors’ conditions                 Request for             Create contract:
                                                                     quotation                Quantity contracts;
         and services                                               Prices Comparison
                                                                                              Value contracts;
                                                                                              Delivery schedule
                                                                    Purchase
        Ensuring tracking and traceability                          requisition
                                                                                             Create purchase
                                                                                              requisition
                                                                    Purchase order
                                                                                             Assign vendor to
     Business Benefits
                                                                     processing
                                                                                              contract
                                                                    Goods receipt
                                                                    Inspect goods
                                                                    Batch number
        Automate operational tasks                                  assignment
                                                                    Stock update
        Improve vendors’ selection and prices comparison           Invoice verification
         through quotation handling
        Formalize agreements by contract management
        Guarantee quality check through goods receipt
         inspections

      SAP AG 2006
         Internal Procurement
 Encompasses cross-plant internal procurement of products including
                                                                                       Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                 Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                               Partners


                                                                                                                 Sourcing & Procurement
                                                                                                                      Procure to Stock
                                                                                                                        Third Party
                                                                                                                                                  Plan &
                                                                                                                                                Manufacture




  creation of all required documents for both with or without delivery                                                                        Production Planning
                                                                                                                                                  Production
                                                                                                                                                                            Sell & Deliver
                                                                                                                                                                         Sales Order Processing
                                                                                                                                                                       Direct Store Delivery (DSD)
                                                                                                                                                                      Rebate & Bonus Management
                                                                                                                                                                              Commissions
                                                                                                                                                                              Indirect Sales




 Provide functions to monitor stock in transit
                                                                                                                                                                                 Returns
                                                                                                                                                                           Empties Processing
                                                                                                                                      Operational End-to-End Scenarios
                                                                                                                                             Inventory Management
                                                                                                                                              Quality Management
                                                                                                                                           Traceability & Food Safety
                                                                                                                                          Cross Company Transactions
                                                                                                                                     Enterprise Management & Support
                                                                                                                                            Financials & Controlling
                                                                                                                                          Excise Duty (Beverage) G65




     Industry Pain Points                                        Solution
        Improving internal purchasing activities                  Stock transfer       Stock transfer
        Ensuring tracking and traceability                         with delivery      without delivery

                                                                   Create stock        Create stock
                                                                    transport order      transport order
                                                                   Process delivery    Post goods issue
                                                                   Post goods issue




     Business Benefits
        Automate operational tasks
        Increased visibility of stock and stock transfers




      SAP AG 2006
      Sales Order Processing
 Manage the entire customer order process — variable pricing, delivery,
                                                                                                 Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                           Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                                         Partners


                                                                                                                           Sourcing & Procurement
                                                                                                                                Procure to Stock
                                                                                                                                  Third Party
                                                                                                                                                            Plan &
                                                                                                                                                          Manufacture




  invoicing, and payment.                                                                                                                               Production Planning
                                                                                                                                                            Production
                                                                                                                                                                                      Sell & Deliver
                                                                                                                                                                                   Sales Order Processing
                                                                                                                                                                                 Direct Store Delivery (DSD)
                                                                                                                                                                                Rebate & Bonus Management
                                                                                                                                                                                        Commissions
                                                                                                                                                                                        Indirect Sales




 Includes Electronic Data Interchange (EDI), handling of consignment sales,
                                                                                                                                                                                           Returns
                                                                                                                                                                                     Empties Processing
                                                                                                                                                Operational End-to-End Scenarios
                                                                                                                                                       Inventory Management
                                                                                                                                                        Quality Management
                                                                                                                                                     Traceability & Food Safety
                                                                                                                                                    Cross Company Transactions
                                                                                                                                               Enterprise Management & Support
                                                                                                                                                      Financials & Controlling




  and foreign trade
                                                                                                                                                    Excise Duty (Beverage) G65




      Industry Pain Points                                                 Solution
         Managing variable pricing conditions
                                                                                                                                          Inbound/Outbound
                                                               Sales                Distribution
         Long order cycle times                                                                                                            EDI Processing

         Meeting customers’ requests for                Process sales order    Picking &                                                Inbound sales order
                                                         Billing                 distribution based                                        via EDI
          improved services                                                       on shelf life                                            Outbound billing
                                                         Payment
                                                                                  expiration date                                           document via EDI
         Managing sales returns cost effectively                                Freight settlement
                                                                                 Handling unit mgt.

      Business Benefits
         Improve sales execution timeline
         Improve order fulfillment rate
         Provide the customer with alternative services and
          methods for invoicing and payments




      SAP AG 2006
      Returns
 Focuses on the processing of credit memos if no goods are sent back.
                                                                                                    Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                              Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                                            Partners


                                                                                                                              Sourcing & Procurement
                                                                                                                                   Procure to Stock
                                                                                                                                     Third Party
                                                                                                                                                               Plan &
                                                                                                                                                             Manufacture
                                                                                                                                                           Production Planning




 Includes quality evaluation for returned goods and appropriate stock
                                                                                                                                                               Production
                                                                                                                                                                                         Sell & Deliver
                                                                                                                                                                                      Sales Order Processing
                                                                                                                                                                                    Direct Store Delivery (DSD)
                                                                                                                                                                                   Rebate & Bonus Management
                                                                                                                                                                                           Commissions
                                                                                                                                                                                           Indirect Sales
                                                                                                                                                                                              Returns




  movement.
                                                                                                                                                                                        Empties Processing
                                                                                                                                                   Operational End-to-End Scenarios
                                                                                                                                                          Inventory Management
                                                                                                                                                           Quality Management
                                                                                                                                                        Traceability & Food Safety
                                                                                                                                                       Cross Company Transactions
                                                                                                                                                  Enterprise Management & Support
                                                                                                                                                         Financials & Controlling
                                                                                                                                                       Excise Duty (Beverage) G65




      Industry Pain Points                                                      Solution
         Efficient handling & document
                                                           Returns and                Returns
          complaints.                                      Complains                 Processing
         Managing sales returns cost efficiently.       Process credit          Ship pallets
                                                          memos                   Return pallets
                                                         Quality evaluation
                                                         Goods movement
                                                          to blocked or
                                                          unrestricted stock.

      Business Benefits
         Enable corporate compliance strategy
         Effective batch-specific returns processing




      SAP AG 2006
       Traceability and Food Safety
 Capability to track and trace products at all stages of production,
                                                                                                 Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                           Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                                         Partners


                                                                                                                           Sourcing & Procurement
                                                                                                                                Procure to Stock
                                                                                                                                  Third Party
                                                                                                                                                            Plan &
                                                                                                                                                          Manufacture




  processing, and distribution                                                                                                                          Production Planning
                                                                                                                                                            Production
                                                                                                                                                                                      Sell & Deliver
                                                                                                                                                                                   Sales Order Processing
                                                                                                                                                                                 Direct Store Delivery (DSD)
                                                                                                                                                                                Rebate & Bonus Management
                                                                                                                                                                                        Commissions
                                                                                                                                                                                        Indirect Sales




 Allow fast and efficient recall of a defective product batch
                                                                                                                                                                                           Returns
                                                                                                                                                                                     Empties Processing
                                                                                                                                                Operational End-to-End Scenarios
                                                                                                                                                       Inventory Management
                                                                                                                                                        Quality Management
                                                                                                                                                     Traceability & Food Safety
                                                                                                                                                    Cross Company Transactions
                                                                                                                                               Enterprise Management & Support
                                                                                                                                                      Financials & Controlling
                                                                                                                                                    Excise Duty (Beverage) G65




       Industry Pain Points                                           Solution
          Complying with food regulations                                Quality                  Batch
                                                                        Management               Management
                 HACCP (Hazard Analysis & Critical Control Points)
                 EU (Article 18 of Regulation 178)                    Quality planning       Batch creation and
                                                                       Quality inspection      determination
                 US (the US Bio-terrorism Act 2002)                   Recording of           Batch-where-use
                                                                        laboratory analysis      lists
          Addressing growing food-safety concerns from                Quality reporting      Recall batches and
                                                                       Quality                 create follow-up
           consumers                                                    improvement             activities
                                                                                               Manage batch-

       Business Benefits
                                                                                                specific return
                                                                                                processing
                                                                                               Manage batches
                                                                                                based on shelf life
          Professionally managing a possible product                                           expiration

           recall
          Minimize risk of non-compliance with food &
           beverage regulations
          Effective batch-specific returns processing

       SAP AG 2006
      Inventory Management
 Consists of the whole procurement and delivery cycle with warehouse for
                                                                                                Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                          Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                                        Partners


                                                                                                                          Sourcing & Procurement
                                                                                                                               Procure to Stock
                                                                                                                                 Third Party
                                                                                                                                                           Plan &
                                                                                                                                                         Manufacture




  the storage management, including quality inspection
                                                                                                                                                       Production Planning
                                                                                                                                                           Production
                                                                                                                                                                                     Sell & Deliver
                                                                                                                                                                                  Sales Order Processing
                                                                                                                                                                                Direct Store Delivery (DSD)
                                                                                                                                                                               Rebate & Bonus Management
                                                                                                                                                                                       Commissions
                                                                                                                                                                                       Indirect Sales
                                                                                                                                                                                          Returns




 Return rejected goods to the vendor
                                                                                                                                                                                    Empties Processing
                                                                                                                                               Operational End-to-End Scenarios
                                                                                                                                                      Inventory Management
                                                                                                                                                       Quality Management
                                                                                                                                                    Traceability & Food Safety
                                                                                                                                                   Cross Company Transactions
                                                                                                                                              Enterprise Management & Support
                                                                                                                                                     Financials & Controlling
                                                                                                                                                   Excise Duty (Beverage) G65




      Industry Pain Points                                Solution
         Maintaining low inventory levels                   Inventory             Warehouse                                                        Transportation
                                                            Management             Management                                                        Management
         Avoiding out-of-stock situations at retailers
                                                           Integration with       Storage                                                          Plan transports
         Establishing visibility to inventory levels       supply chain            Management                                                       Monitor execution
                                                            accounting
          throughout the entire supply chain               Goods receipt
                                                                                   Quality
                                                                                    Management
                                                                                                                                                     Calculate costs
                                                                                                                                                     Manage
                                                           Goods issues           Quality Inspection                                                transportation
                                                           Managing different     Return of goods                                                   settlement
                                                            stock categories

      Business Benefits                                    Inventory valuation



         Reduce working capital by keeping
          inventory levels low
         Increase sales by reducing out-of-stock
          situations
         Improve consumer retention due to
          product availability

      SAP AG 2006
      Financials and Controlling
 Helps to get an insight into all aspects related to accounting and
                                                                                                 Suppliers & Partners   Analyze, Plan &    Procure         Manufacture        Market & Sell     Deliver & Service       Customers,
                                                                                                                           Develop                                                                                  Consumers, Channel
                                                                                                                                                                                                                         Partners


                                                                                                                           Sourcing & Procurement
                                                                                                                                Procure to Stock
                                                                                                                                  Third Party
                                                                                                                                                            Plan &
                                                                                                                                                          Manufacture




  controlling                                                                                                                                           Production Planning
                                                                                                                                                            Production
                                                                                                                                                                                      Sell & Deliver
                                                                                                                                                                                   Sales Order Processing
                                                                                                                                                                                 Direct Store Delivery (DSD)
                                                                                                                                                                                Rebate & Bonus Management
                                                                                                                                                                                        Commissions
                                                                                                                                                                                        Indirect Sales




 Provides streamlined functionalities that allows visibility, increases
                                                                                                                                                                                           Returns
                                                                                                                                                                                     Empties Processing
                                                                                                                                                Operational End-to-End Scenarios
                                                                                                                                                       Inventory Management
                                                                                                                                                        Quality Management
                                                                                                                                                     Traceability & Food Safety
                                                                                                                                                    Cross Company Transactions
                                                                                                                                               Enterprise Management & Support
                                                                                                                                                      Financials & Controlling




  productivity and regain control of their business processes
                                                                                                                                                    Excise Duty (Beverage) G65




      Industry Pain Points                                             Solution
         Meeting local legal and fiscal requirements                      Financials                      Controlling
         Improving administrative activities efficiency
                                                                        General Ledger        Standard cost and
         Maintaining focus on most profitable customers                 accounting             profit center
                                                                                                accounting
          and brands                                                    Accounts payable
                                                                         accounting            Profitability analysis
                                                                        Accounts              Product costs

      Business Benefits
                                                                         receivable             planning
                                                                         accounting            Product cost
                                                                        Bank accounting        controlling
                                                                        Closing activities
         Implement an ERP solution fully compliant                     Cash management
          and continuously updated with local legal                     Assets
                                                                         management
          and fiscal requirements
         Improve efficiency in accounting activities
          due to a seamless process integration
         Enhance company profitability analysis
          through profit and loss calculation

      SAP AG 2006
       Our Specific Solution Offering for the Dairy Industry
Suppliers & Partners      Analyze, Plan &              Procure             Manufacture          Market & Sell         Deliver & Service      Customers (e.g.
                             Develop                                                                                                       Retailers) & Channel
                              Sourcing & Procurement                                                                                             Partners
                                    Procure to Stock
                                 Internal Procurement                                                                                        Dairy
                             Milk Procurement from Producer
                          Additional Raw Material Procurement                                                   Food
                                                                         Manufacturing
                            Product                                      Dairy Production
                         Development                                    Planning & Process
                       Recipe Management                                      Control

                                                                                                         Sell & Deliver
                                                                                                      Sales Order Processing
                                                                                                             Returns
                                                                                                        Raw Material Sales



                                                            Operational End-to-End Scenarios
                                                                 Traceability & Food Safety
                                                                   Inventory Management
                                                                    Quality Management



                                                            Enterprise Management & Support
                                                                            Financials
                                Financial Accounting                     Cash Management                       Asset Management
                                                                            Controlling
                       Standard Cost & Profit Center
                                                         Product Cost Planning   CO-PA for Consumer Products     Cost Object Controlling
                               Accounting


       SAP AG 2006
      Product Development with Recipe Management
 Managing the fast and efficient product development by structured re-                     Suppliers & Partners     Analyze, Plan &
                                                                                                                        Develop
                                                                                                                                             Procure




                                                                                                                        Sourcing & Procuremen t
                                                                                                                                                                   Manufacture           Market & Sell       Deliver & Service     Customers (e.g.
                                                                                                                                                                                                                                 Retailers) & Channel
                                                                                                                                                                                                                                       Partners



                                                                                                                       Milk Procurement from Producer




  usable product specifications
                                                                                                                     Additional Raw Material Procurement
                                                                                                                                Procure to Stock

                                                                                                                      Produc t
                                                                                                                    Development
                                                                                                                   Recipe Management
                                                                                                                                                                 Manufactu ri
                                                                                                                                                                       ng
                                                                                                                                                                Dairy Production
                                                                                                                                                                    Planning
                                                                                                                                                              Dairy Proce ss Control




 Seamless integration into the production planning and execution process
                                                                                                                                                                                                  Sell & Deliver
                                                                                                                                                                                               Sales Order Processing
                                                                                                                                                                                                 Raw Material Sales
                                                                                                                                                                                                    Indirect Sales
                                                                                                                                                                                             Direct Store Delivery (DSD)

                                                                                                                                                   Opera tional End-to-End Scena rios
                                                                                                                                                            Traceability & Food Safety
                                                                                                                                                             Inventory Management
                                                                                                                                                               Quality Management
                                                                                                                                                           Cro ss Company Transactions

                                                                                                                                                  Ente rprise Management & Support
                                                                                                                                                                    Financials
                                                                                                                                                                   Controlling




      Industry Pain Points                                 Solution
         Slow and inefficient product development           Product Data        Product Lifecycle
                                                             Management            Management
         Changing consumer tastes and
          requirements                                      Maintain product
                                                             specifications
                                                                                   Document
                                                                                    Management
         Increasing demand for new products                Label Management      Change
                                                                                    Management
                                                            Multilevel recipe
                                                             mgt.                  Integrate Recipe
                                                            Define Batch           into production
                                                             Management             process

      Business Benefit                                                             Create master
                                                                                    recipe
                                                                                   Create process
                                                                                    order
         Reduce development cycle time & costs
         Ensure company-wide consistent product
          information
         Reduce time-to-market to gain competitive
          advantage


      SAP AG 2006
      Milk Procurement from the Producer
 Encompasses the efficient procurement and collection of raw milk                                 Suppliers & Partners     Analyze, Plan &
                                                                                                                               Develop
                                                                                                                                                    Procure




                                                                                                                               Sourcing & Procuremen t
                                                                                                                                                                          Manufacture           Market & Sell       Deliver & Service     Customers (e.g.
                                                                                                                                                                                                                                        Retailers) & Channel
                                                                                                                                                                                                                                              Partners



                                                                                                                              Milk Procurement from Producer
                                                                                                                            Additional Raw Material Procurement




 Ensure compliance with high quality standards and traceability requirements
                                                                                                                                       Procure to Stock

                                                                                                                             Produc t
                                                                                                                           Development
                                                                                                                          Recipe Management
                                                                                                                                                                        Manufactu ri
                                                                                                                                                                              ng
                                                                                                                                                                       Dairy Production
                                                                                                                                                                           Planning
                                                                                                                                                                     Dairy Proce ss Control


                                                                                                                                                                                                         Sell & Deliver
                                                                                                                                                                                                      Sales Order Processing




 Calculate payments based on quantity and quality characteristics
                                                                                                                                                                                                        Raw Material Sales
                                                                                                                                                                                                           Indirect Sales
                                                                                                                                                                                                    Direct Store Delivery (DSD)

                                                                                                                                                          Opera tional End-to-End Scena rios
                                                                                                                                                                   Traceability & Food Safety
                                                                                                                                                                    Inventory Management
                                                                                                                                                                      Quality Management
                                                                                                                                                                  Cro ss Company Transactions

                                                                                                                                                         Ente rprise Management & Support
                                                                                                                                                                           Financials




 Monitor procurement and payment process
                                                                                                                                                                          Controlling




      Industry Pain Points                                Solution
         Managing the complex payment conditions          Milk Collection            Milk Reception                                                                              Milk Analysis
         Coping with seasonal fluctuation and
          changing demands                                  Maintain standard        Dairy reception                                                                    Gather results of
                                                             routes                    cockpit                                                                             inspection lots from
         Complying with the high quality standards         Provide route list to    Process purchase                                                                    producer samples
                                                             truck driver              Order                                                                              Gather results of
          and traceability requirements                                               Automatic creation                                                                  inspection lots from
                                                                                       of inspection lot                                                                   tank truck samples
                                                                                       and batch number                                                                   Create usage

      Business Benefits                                                               Batch management                                                                    decision for
                                                                                                                                                                           inspection lots


         Enable accurate payment both for                                               Reporting &
                                                            Milk Payment
                                                                                          Analysis
          producer and transport service provider
         Provide payment reporting to the producer         Calculate payment  Monitor raw milk
                                                             for producer            quantity & quality
                                                            Calculate payment       characteristics
         Streamline raw milk collection & reception         for transport service  Payment reporting
          process                                            provider
                                                            Settle payment
                                                            Maintain payment
                                                             calculation scheme

      SAP AG 2006
       Additional Raw Material Procurement
 Supports the additional purchase of raw materials from other companies on the                 Suppliers & Partners     Analyze, Plan &
                                                                                                                            Develop
                                                                                                                                                 Procure




                                                                                                                            Sourcing & Procuremen t
                                                                                                                                                                       Manufacture           Market & Sell       Deliver & Service     Customers (e.g.
                                                                                                                                                                                                                                     Retailers) & Channel
                                                                                                                                                                                                                                           Partners



                                                                                                                           Milk Procurement from Producer




  determined shortage in the demand planning process
                                                                                                                         Additional Raw Material Procurement
                                                                                                                                    Procure to Stock

                                                                                                                          Produc t
                                                                                                                        Development
                                                                                                                       Recipe Management
                                                                                                                                                                     Manufactu ri
                                                                                                                                                                           ng
                                                                                                                                                                    Dairy Production
                                                                                                                                                                        Planning
                                                                                                                                                                  Dairy Proce ss Control




 Calculate vendor payment based on the raw material quantity and quality
                                                                                                                                                                                                      Sell & Deliver
                                                                                                                                                                                                   Sales Order Processing
                                                                                                                                                                                                     Raw Material Sales
                                                                                                                                                                                                        Indirect Sales
                                                                                                                                                                                                 Direct Store Delivery (DSD)

                                                                                                                                                       Opera tional End-to-End Scena rios
                                                                                                                                                                Traceability & Food Safety
                                                                                                                                                                 Inventory Management
                                                                                                                                                                   Quality Management




  characteristics.
                                                                                                                                                               Cro ss Company Transactions

                                                                                                                                                      Ente rprise Management & Support
                                                                                                                                                                        Financials
                                                                                                                                                                       Controlling




      Industry Pain Points                                Solution
                                                            Raw Material
         Determining demand for additional                   Demand
                                                                                    Raw Material                                                                                     Raw Material
          required raw material due to ever-                                         Reception                                                                                         Analysis
                                                             Planning
          changing quantity and quality of collected       Determine required  Post goods receipt                                                                  Gather results of
                                                            additional raw                                                                                            inspection lots
          raw milk                                          materials
                                                                                Automatic creation
                                                                                 of inspection lot                                                                   Create usage
                                                           Create purchase      and batch number                                                                     decision for
         Managing the vendor payment based on              order               Batch management                                                                     inspection lots
          raw material quality characteristics


      Business Benefits                                     Raw Material             Reporting &
                                                             Payment                  Analysis
         Increase demand planning accuracy                Calculate vendor      Monitor raw
                                                            payment for            material quantity &
         Handle the quality-based payment for the          additional             quality
                                                            purchased raw          characteristics
          vendor                                            material              Payment reporting
                                                           Settle payment
                                                           Maintain payment
                                                            calculation scheme



      SAP AG 2006
        Dairy Production Planning and Process Control
 Manage the multilevel manufacturing processes including seamless batch                            Suppliers & Partners     Analyze, Plan &
                                                                                                                                Develop
                                                                                                                                                     Procure




                                                                                                                                Sourcing & Procuremen t
                                                                                                                               Milk Procurement from Producer
                                                                                                                                                                           Manufacture           Market & Sell       Deliver & Service     Customers (e.g.
                                                                                                                                                                                                                                         Retailers) & Channel
                                                                                                                                                                                                                                               Partners




                                                                                                                             Additional Raw Material Procurement




  and quality management
                                                                                                                                        Procure to Stock

                                                                                                                              Produc t
                                                                                                                            Development
                                                                                                                           Recipe Management
                                                                                                                                                                         Manufactu ri
                                                                                                                                                                               ng
                                                                                                                                                                        Dairy Production
                                                                                                                                                                            Planning
                                                                                                                                                                      Dairy Proce ss Control




 Incorporates the ever-changing quantity and quality of the raw material
                                                                                                                                                                                                          Sell & Deliver
                                                                                                                                                                                                       Sales Order Processing
                                                                                                                                                                                                         Raw Material Sales
                                                                                                                                                                                                            Indirect Sales
                                                                                                                                                                                                     Direct Store Delivery (DSD)

                                                                                                                                                           Opera tional End-to-End Scena rios
                                                                                                                                                                    Traceability & Food Safety
                                                                                                                                                                     Inventory Management
                                                                                                                                                                       Quality Management
                                                                                                                                                                   Cro ss Company Transactions




 Provide powerful tools to gain a cross-stages raw material controlling
                                                                                                                                                          Ente rprise Management & Support
                                                                                                                                                                            Financials
                                                                                                                                                                           Controlling




    Industry Pain Points                                   Solution
       Production Planning based on a non-                   Production                                                                                                               Quality
                                                                                      Process Control
        standardized raw material                              Planning                                                                                                              Management
       High cost of the raw material comparing to           Demand planning          Maintain product                                                                   Create inspection
        the total production costs                            based on historical
                                                              data
                                                                                        master data & recipes
                                                                                        for multilevel
                                                                                                                                                                            lots for semi-
                                                                                                                                                                            finished and
       Defining optimal product mix in order to             Production planning       production                                                                          finished goods
                                                              synchronous to           Batch management                                                                   Gather results of
        maximize utilization & profitablity                   sales                     across all stages                                                                   inspection lots
                                                             Material resource        Separate raw milk                                                                  Create usage

    Business Benefits                                         planning (without
                                                              shelf-life)
                                                                                        into components
                                                                                       Material valuation
                                                                                                                                                                            decision for
                                                                                                                                                                            inspection lots
                                                             Simulate planning        Manage shelf-life
                                                             Graphical capacity        expiration date for
       Optimize and streamline production process            planning                  final products

       Increase profitability by improved visibility
                                                              Controlling &
        to raw material utilization and losses                  Analysis
       Comply with the high quality standards and            Cross-stages raw
                                                               material controlling
        traceability requirements                             Product costing
                                                              Batch information
                                                               cockpit
                                                              Production
                                                               information system
      SAP AG 2006
      Raw Material Sales
 Supports the sales of raw materials between dairies based on the raw material                    Suppliers & Partners     Analyze, Plan &
                                                                                                                               Develop
                                                                                                                                                    Procure




                                                                                                                               Sourcing & Procuremen t
                                                                                                                                                                          Manufacture           Market & Sell       Deliver & Service     Customers (e.g.
                                                                                                                                                                                                                                        Retailers) & Channel
                                                                                                                                                                                                                                              Partners



                                                                                                                              Milk Procurement from Producer




  requirements and the available surpluses
                                                                                                                            Additional Raw Material Procurement
                                                                                                                                       Procure to Stock

                                                                                                                             Produc t
                                                                                                                           Development
                                                                                                                          Recipe Management
                                                                                                                                                                        Manufactu ri
                                                                                                                                                                              ng
                                                                                                                                                                       Dairy Production
                                                                                                                                                                           Planning
                                                                                                                                                                     Dairy Proce ss Control




 Pricing and distribution are based on the raw material quality characteristics
                                                                                                                                                                                                         Sell & Deliver
                                                                                                                                                                                                      Sales Order Processing
                                                                                                                                                                                                        Raw Material Sales
                                                                                                                                                                                                           Indirect Sales
                                                                                                                                                                                                    Direct Store Delivery (DSD)

                                                                                                                                                          Opera tional End-to-End Scena rios
                                                                                                                                                                   Traceability & Food Safety
                                                                                                                                                                    Inventory Management
                                                                                                                                                                      Quality Management
                                                                                                                                                                  Cro ss Company Transactions

                                                                                                                                                         Ente rprise Management & Support
                                                                                                                                                                           Financials
                                                                                                                                                                          Controlling




      Industry Pain Points                                  Solution
         Managing variable pricing conditions                  Production                  Sales                                                                                       Distribution
          based on quality characteristics
                                                              Manage process         Process sales                                                                 Picking based on
                                                               order                   document                                                                       quality
                                                              Create inspection                                                                                      characteristics
                                                               lot                                                                                                   Create inspection
                                                                                                                                                                      lot for picked raw
                                                                                                                                                                      material
                                                                                                                                                                     Usage decision and

      Business Benefits                                                                                                                                               goods issue



         Simplify price determination by using
                                                                   Billing
          the integrated batch and quality
          management system                                   Invoice processing
                                                              Price determination
         Improve sales execution timeline                     based on quality
                                                               characteristics




      SAP AG 2006
   SAP ERP for the Dairy Industry Provides Increased
   Shareholder Value for Your Business
Business Objectives         Business Areas        Business Opportunities                                SAP Scenarios
                                                                                                        (SAP ERP for the Dairy Industry)
                            Improve customer      Improve order fulfillment
                                                                                                           Sales and Customer Order
                  Revenue   satisfaction          Improve sales execution timeline
                  Growth                          Improve customer understanding
                                                                                                                     Indirect Sales
                            Increase sales
                                                  Improve order fill rate                                        Raw Material Sales
                                                   Reduce operating costs and
                            Distribution           increase efficiency                                          Recipe Management

                                                  Enable detailed profitability
                            Finance               analysis                                                 Financials and Controlling
                                                  Improve efficiencies in
                                                  accounting activities
Shareholder
                                                  Increase efficiency for sales
   Value                    Customer service      returns
                                                                                                                         Returns
                  Reduce
                   Cost                           Improve transparency in dairy
                                                                                                                  Milk Procurement
                                                  procurement
                            Procurement
                                                  Lower raw materials costs                                       Procure to Stock

                                                  Realtime access to production
                                                                                                            Product Cost Controlling
                                                  cost information

                            Production            Improve yield and reduce waste
                                                                                                                    Manufacturing
                                                  Calculate and monitor production
                  Reduce                          costs seamlessly
                  Working   Inventory             Optimize inventory usage                                    Inventory Management
                  Capital
                  Reduce    Comply with food      Utilize full track-and-trace                                        Food Safety
                   Risk     regulations           capability

                                               * For further details, please refer to the SAP ERP for the Dairy Industry Brief.

   SAP AG 2006

								
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