sap for wholesale distribution: enabling profitable...

SAP for Wholesale Distribution: Enabling Profitable Growth

Paul Pretko

Industry Principal, Wholesale Distribution

© SAP AG 2002, 2

Wholesale Distribution is Different

Enabling technology is required to drive profitable growth as the wholesale distribution

industry continues to consolidate

Profitable Growth

Disruptive Growth

Survival

TotalCompany

Value

Technology Adoption

© SAP AG 2002, 3

Different Business Issues

Increasing Profitability (ROA) by Addressing : Improve Gross Margins (Reduce COGS)

Need to take advantage of all order optimization (line buy) opportunitiesNeed to take advantage of all investment buy opportunitiesNeed to reduce days chargebacks and rebates outstanding

Increase RevenueNeed to reduce days sales outstanding and deductionsNeed to improve service levels and speed new product offering to marketNeed to charge for new value added services

Reduce Operating Expenses (60% is Payroll)Need to improve accounting and controlling process efficienciesNeed to increase warehouse productivity (50% of Payroll)Need to improve inventory turns

© SAP AG 2002, 4

Different Signature Processes

Procure to Pay

Inbound Logistics

•Purchase Pricing•Demand Planning•MRP•Strategic Sourcing•Purchase Order Mgt•Line Buy & Deal Buy•Receiving•Supplier Contracts•Rebates•Invoice Verification

Outbound Logistics

Order to Cash

Internal Processing

•Value Added Services•Sales Pricing•ATP & Allocation•Distribute-to-Order•Sales Order Mgt•Chargebacks•Returns•Warehouse Management•Backorder Processing•Customer Contracts

• Accounts Payable• Inventory Management• EDI Processing• Cost Management• Credit Management• Accounts Receivables• Mass Maintenance• Price Protection• Physical Inventory• DRP & Deployment

© SAP AG 2002, 5

and Different Challenges . . .

Source: Russell Reynolds

© SAP AG 2002, 6

. . . requiring Different Solutions

mySAP ERP

+

© SAP AG 2002, 7

SAP for Wholesale Distribution - Value Chain

PLANPLAN

SELLSELL

ANALYZEANALYZE

SOURCESOURCE

STORESTORE

OPTIMIZE

MARKET

mySAP Business SuiteScenarios=

= mySAP ERPScenarios

SAP forWholesale

Distribution

© SAP AG 2002, 8

SAP for Wholesale Distribution - Solution Map

Strategic Planning Strategic Enterprise Management Accounting Controlling Business Reporting Profitability Analytics

Sales & Marketing Account Management Marketing Customer

Service Field Sales Telesales Internet Sales Route Sales

Procure-to-Pay Management Supplier Management Product Management Self Service Procurement Procurement

Supply Chain Planning Strategic Planning & Optimization Demand & Supply Planning Advanced Planning Order Optimization

Order-to-Cash Management Sales Order Management Value Added Services Trade Management

Supply Chain Execution Direct Store Delivery Transportation Management Warehouse Management Fulfillment Planning

Business Support Financial Supply Chain Management Human Resource Management Commissions & Chargeback Management

© SAP AG 2002, 9

SAP NetWeaver in Wholesale Distribution

mySAP ERP

PPPP

SD IPSD IP

FI COFI CO

MMMM

WMWM

Commission

Inv

Time

Non SAP DisruptiveGrowth

Profitable Growth

SAP

Net

Wea

ver

© SAP AG 2002, 12

Myth Busting through References

Fact

On time and on budget

Personalized for their industry

Two-thirds of our customers are midsize

Flexible hosting options

Easy to configure (IMG & GUIXT)

SAP NetWeaver is an integration platform

Approx. 57% of ASUG members are midsize

61% of implementation take less than 9 months

Myth

Expensive to purchase

Very complex

Designed for very large companies

Requires a large IT staff

Inflexible

Hard to integrate with other applications

Smaller companies have no influence

Take to long to implement

“This was going to be the largest single investment in the companies history, and we wanted to make sure we selected the safest and most reliable partner for our future”

Ron Blevins, The Wolf Organization

sap for wholesale distribution: enabling profitable...

Documents