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SAP Solutions for Trading Industries Sheep to Shopper

Retail, Wholesale, and Travel & Logistics Services

Verlin Youd SVP Global Trade Sector

SEE YOUR WAY CLEAR


Strategies for Success in the New Reality

Agenda

1. Connecting with your Customer 2. Solutions That Link Sheep to Shopper 3. Partner Innovation 4. Maximizing Your Investment 5. A Quick and Modular Approach

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Key Trends Are Driving Changes

Globalization

Challenging economy

Sustainable operations

Increased risk

Intensified competition

Global sourcing

Shoppers are

Green products

Compliance

Leverage

strategies
Proliferation of

special pricing
Supplier

spending less; you must increase loyalty


You cannot

and services
Increased

efficiency
Social

imperative: Sarbanes-Oxley Act and RFID


Lack of capital Market volatility

informed workers to create value


Differentiate for

consolidation

afford operational inefficiency

responsibility

survival

price wars

Now, more than ever, connecting with the customer is essential to your business
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Trading Industries Vision How to Connect with Your Customer

In todays economy, the customer customer must be the center of any initiative. To connect with the customer, you must have a clear enterprise that will provide improved performance through insight , drive efficiency to optimize operations, and create new business value with flexibility .

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Agenda

1. Connecting with Your Customer 2. Solutions That Link Sheep to Shopper 3. Partner Innovation 4. Maximizing Your Investment 5. A Quick and Modular Approach

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Solutions That Link Sheep to Shopper Sheep

So what does it mean to have a

clear enterprise?

Shopper Shop
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Solutions That Connect with the Customer Retail


Insight

Provide real-time visibility with SAP BusinessObjects business intelligence solutions Optimize price based on an understanding shopper demand and allow use of pricing as a strategic lever in meeting goals Leverage customer analytics to understand your shoppers better and align your offering with their expectations and desires

Efficiency

Endure that you provide the service your shoppers expect, as efficiently as possible, with the SAP Workforce Management application Reduce risk by leveraging loss prevention to evaluate each POS transaction for accuracy and integrity Reduce costly out -of-stock instances while removing inventory from the supply chain with the SAP Forecasting and Replenishment application

Flexibility

Store loyalty allows you to offer creative, compelling programs for your shoppers The SAP Promotion Management application gives you control to target promotional offers by region, store, or channel SAP BusinessObjects enterprise performance management (EPM) solutions give you the ability to adjust quickly to changing market conditions

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Solutions That Connect with the Customer


Insight

Wholesale Distribution

Increase working capital with the SAP Paybacks and Chargebacks application by Vistex Reduce the cost of goods sold and buy smarter with an integrated sourcing and procurement solution

Efficiency

Improve operating efficiencies with warehouse management functionality from SAP Streamline accounting, financial close, customer service, and HR processes with SAP ERP Be easier to do business with automate order-to-cash process and enable all sales channels for your customers

Flexibility

Adapt to changing business conditions with the SAP Price and Margin Management application by Vendavo Sense and respond to changes with SAP Supply Chain Management

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Solutions That Connect with the Customer


Insight

Travel & Logistics Services

Gain real-time visibility across entire supply chain with the SAP Event Management application Gain a 360-degree view of the customer with the SAP Customer Relationship Management (SAP CRM) application

Efficiency

Business process platform to connect all suppliers, vendors, and service providers to share common data for operations and analytics Global trade services that promote seamless cross-boarder movements Centralized financial and operational management for diverse operations

Flexibility

Supply chain and event management solutions respond to transportation issues before they become customer complaints Transportation and warehousing solutions react to supply chains that change rapidly while keeping logistics costs as low as possible

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SAP Business Suite 7 Applications


Increase Efficiency and Reduce Risk

1 2 3

Process excellence

Introduction of value scenarios Consolidated industry capabilities

Reduced cost

Switch framework Modular approach

Capture opportunities

Leverage current investments Increased visibility and agility

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Leveraging the clear enterprise from SAP


Retail

Reduced labor associated with store ordering by 95% Reduced out-of-stock by 75% Automated store replenishment increased from 60% to 81% Stock reduced from 34 days of coverage to 10-14 days

Improved in-stock rates from 89% to 98% (99% for key items) Improved store replenishment cycle time from 35 days to 8 days

Wholesale

Increasedchargebackclaims114%afterswitchingfromlegacytoSAPsolution ROIforSAPChargebackManagementwassignificantlylessthan6months! Achievedpaperlesswarehouseenvironment;increasedwhsespaceavailabilityby14% ExpectedROIwas36months.Achieveditinlessthan18months! LeveragedWM,ERPandChargebackManagementsolutionstodrivecompetitiveadvantage Nowsuccessfullymanaging+$150MMannuallyinchargebacks Increase in parts availability to 98% 60% less in delivery discrepancies Enhanced flexibility to respond quickly to changing customer needs Improved integration with customer SAP software enabling real-time process tracking Improved on-time deliveries by 17% to its current 97% Improved customer service while reducing customer support costs

Travel and Logistics


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Agenda

1.Connecting with Your Customer 2. Solutions That Link Sheep to Shopper 3. Partner Innovation 4. Maximizing Your Investment 5. A Quick and Modular Approach

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Connecting with the Customer Through Partner Innovation

Travel & Logistics Services

Wholesale Distribution

Retail

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Effective Retail Price Optimization


SAP and Best-in-Class Price Management and Optimization SAP merchandise lifecycle pricing software can help you in your efforts to connect your value to what your shoppers are willing to spend while increasing your competitive position and your customer loyalty. Has your organization thought about:
Whether you are priced competitively in your various regions and zones? How to increase sales and margins with your current store traffic? If you have a high level of pricing compliance on the store shelves?

Key Benefits: Increase gross margins and increase sales Compete more effectively while improving your price image and customer loyalty Increase gross margin dollar benefit from 1% to 8% Increase sales up to 3%

Deloitte: The Value of Experience Deloitte has a demonstrated track record of price strategy, merchandise lifecycle pricing, and price execution related experience that can help your organization better understand the value of a world-class pricing capability. Our pricing transformation related experience spans multiple industries. We can help you in your efforts to drive value and uncover key insight that can be leveraged by your company. Learn more about:
Assessing the value of the SAP Merchandising Lifecycle Pricing solution. Rapid deployment of pricing initiatives to generate quick wins while framing up your long-term solution. Potential benefit benchmarks from multiple industries and spanning different phases of the pricing lifecycle.

Retailers adopting comprehensive lifecycle pricing strategies that include promotional planning, revenue optimization, and advertising execution achieve gross margin improvements between 4% and 16%. Source: AMR Research, June 2008

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Vendor Cost Recovery Solution From SAP and Vistex - Faster, Cheaper, Better
Days Chargeback Outstanding

SAP Paybacks and Chargebacks by Vistex Offers an end-to-end chargeback solution Identifies every cost-recovery opportunity and rebate claims that are due to distributors
Average 1st Quartile

35 30 25 20 15 10 5 0

30

27
3

Connects chargeback process with order-tocash and finance processes to eliminate costly errors, disputes and delays Increases worker productivity and overall financial performance and profitability

Days

2008

2008

Source: NAED

The chargeback process for us determines whether or not we are profitable. We do, on an average, US $168 million a year in chargebacks.
Paul Fipps, vice president, business services The Charmer Sunbelt Group, May 2008

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Optimizing MRO Planning and Execution iMRO from HCL-Axon


Key Benefits: Improved asset utilization; reduced down-time for maintenance Faster maintenance turn-times Process automation resulting in greater data accuracy and data input Full regulatory compliance Reducing inventory levels Improved cost visibility for more accurate pricing Ability to bid for higher margin fleet and PBH contracts Faster quotes, more accurate and faster billing

The consensus (SUGAIR) remains supportive of the initiative as it has been from the start" (SUGAIR chairman Alun Pryer (British Airways))

Collaboration bringing together 25 years in developing and delivering SAP Maintenance Repair and Overhaul (MRO) solution Improves productivity and usability for aviation and aerospace maintenance Reduces implementation time, cost and risk to customers

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Efficient Retail Cash Management & Accurate Liabilities


The SAP and Open Text Invoice Management Solution
Key Benefits: Increase cash availability through improved Accounts Payable processes Shorten financial close cycles 100% improvement for daily invoice processing 20%+ improvements in clean PO passing Business Benefits Increase productivity and revenue by minimizing manual processes through integration and automation Improve cash management and shorten closing cycles by streamlining the payment process Become a dependable business partner to your suppliers with shortened invoice-topay cycles and accurate, timely information Take control of your business through an accurate picture of todays invoice processing that can support your decisions for tomorrows opportunities Key Features AP process integration single, unified view of the process company-wide, from purchase through payment Controlled financial processes Classify, route, and sort invoices automatically; systematically detect invoice exceptions and duplications; and get the right invoice to the right person at the right time Internal and external reporting Automate reporting to support everything from corporate financial requirements to trade regulations to continuous improvement programs Compliance Support your rigorous process to help ensure compliance based on integrated, consolidated information and enhanced reporting features

The challenge of executing retail is

behind the scenes. Invoice payment errors result in lost incentives, double payments or late payments Exceptions typically require multiple desks and days to resolve. Including a rock solid audit trail requires complex business processes/change management/and systems to achieve the appropriate level of audit capabilities.
Source: AMR Research, April, 2009

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Agenda

1. Connecting with Your Customer 2. Solutions That Link Sheep to Shopper 3. Partner Innovation 4. Maximizing Your Investment 5. A Quick and Modular Approach

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SAP Services Offerings

On time, on budget, and on value

Best-run business

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Two Value Engineering Programs to Help You Become a Best-Run Business


Benchmarking

Value academy

Strategic service by the value engineering group at SAP Launched at the end of 2004 jointly with Americas SAP Users Group (ASUG), as a forum to exchange metrics and best practices Provides a context for how your company is operating relative to its peers and like-sized companies One of the largest benchmarking programs in the industry

Our vision is to make every customer a best-run business. With the increased importance of delivering and measuring tangible benefits, we decided that it is the right time to open our value platform to our strategic customers Companies can adopt the value DNA through the value academy ,which covers the following areas:

Industry best practices Benchmarking Business cases Case studies and whitepapers

Covers 26 processes More than 3,500 participants Over 1,500 companies Increasingly global participant base

The 2.5-day course is structured along the value life cycle and consists of hands-on training on value life-cycle platform and tools Course participation is free in 2009, with value academies offered throughout the country

Survey participation is free of charge

Participants receive customized and confidential benchmarking comparison against industry peers

Please contact your local value engineering representative for additional information on these programs
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Agenda

1. Connecting with Your Customer 2. Solutions That Link Sheep to Shopper 3. Partner Innovation 4. Maximizing Your Investment 5. A Quick and Modular Approach

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Package Approach at SAP


Drive Modularity Without Giving Up Your Strategy

Modularity

Expensive No long-term viability or direction Difficulty synchronizing integration between upgraded versions Each must integrate to legacy applications

Quick, modular approach drives value Standard, best in class integration tools Ability to upgrade on your schedule Integrated to legacy and new innovation

Lengthy implementation cycle Huge change management effort Proprietary integration tools New upgrades = new implementation

Completeness of solution
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Implement in Small Steps


Packages Combine Products, Services, and Partners

Quick deployment
Implementation in months not years

Immediate return on investment


Gain the benefits in 912 months

Modular
Implement key functionality step-by-step

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Packages Align with and Integrate Back into Your Business Processes

Retail comp store planning


Combine Combine easy-to-use easy-to-use features features with with retail retail planning best-practice planning best-practice methodologies methodologies to to enable enable more more efficient efficient and and precise precise comparable comparable store store sales sales planning planning SAP SAP BusinessObjects BusinessObjects Planning Planning and and Consolidation Consolidation application application SAP SAP Merchandise Merchandise and and Assortment Assortment Planning Planning application application SAP SAP Services Services offerings offerings

Price optimization
A comprehensive understanding understanding of of A comprehensive shopper demand shopper demand and and strategic strategic goals goals lead lead to optimized prices to optimized prices SAP Price Optimization Optimization application application SAP Price IBM Business Business Partner IBM Partner SAP offerings SAP Services Services offerings

Service-oriented architecture (SOA) promotion content integration


Using Using SOA, SOA, the the promotion promotion planning planning solution solution can can integrate integrate with with many many content content management management solutions solutions and and leverage leverage assets assets to to build build promotions promotions

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Why SAP?

The

global market leader with a suite of comprehensive solutions that provide a clear enterprise Industry specific solutions built around customer insight Continuous solution enhancements based on customer needs Over 10,000 trading industry companies rely upon SAP software to run business critical processes with efficiency and enjoy 24x7 support around the world Innovation without disruption, leveraging a platform that provides flexibility
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Thank you!

Copyright 2009 SAP AG All Rights Reserved


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