Dairy Presentation

©SAP AG 2005, SAP ERP Packaged Solution for the Diary Industry / 1

Midmarket Dairy Industry

SAP™ ERP packaged solution for the dairy industry

Version: 11.01.2005


1. Challenges, Strategies and Benefits

5. Summary4. Value and Proof Points

2. The Solution 3. SAP™ ERP packaged solution for the dairy industry






Farmer Tank Truck

DairyProduction

Retailer

Dairy

Cooperatives Authorities External Laboratories

Raw Material, Packaging, Service Wholesaler

Distr. Centers

Broker

Collect Raw Milk

Sell Raw Material and Ingredients

SupplierAdd. Purchase of Raw Material / Raw Milk

The Dairy Industry Ecosystem


YOUR FOCUS

Increase Shareholder ValueIncrease Revenue and Profit Margins

Operational ExcellenceProduct Leadership

Improve Customer Satisfaction

Dairy Companies Often Havethe Right Focus and the Right Strategies…

Protect and enhance revenue

Improve margins

Drive for lower costs

Get closer to the consumer

Improve time-to-market

Enhance operational efficiency

YOUR FOCUS

Increase Shareholder ValueIncrease Revenue and Profit Margins

Cost LeadershipProduct Leadership

Improve Customer Satisfaction

Business STRATEGY


…But Mostly They Lack the Ability to Execute

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

COMPLICATED TO OPERATEComplex and broken process flowsIncomplete or hidden information

DIFFICULT TO CONTROLLack of visibility Lack of traceability

CHALLENGING TO CHANGEMultiple costly integration points Redundant and inconsistent data

Business Enabler

Business STRATEGY

Ability to EXECUTE

A business enabler is required to help the organization refocus

on business strategies!


Market Forces and Business Needs

Market ForcesRetailer power (Wal-Mart effect)Consumer concerns about food safety; media attentionIncreased legislation and regulations around food safety by FDA and other authorities (e.g., EU Dir. 178/2002, the U.S. Bioterrorism Act of 2002)Changing consumer demands due to demographics and trendsShorter product life cyclesExtreme price pressure and margin erosion Restrictive consumer spending patternMarket consolidation (globalization, M&As) Increasing competitionEmerging private labelsNew technologies reshaping the industry

Resulting Key ChallengesDevelop new products faster and more effectively

Optimize supply chain

Increase efficiency in procurement

Optimize manufacturing

Ensure food safety and regulatory compliance

Improve sales efficiency


Develop New Products Faster and More Effectively

BenefitsFaster development by creating reusable product specifications

Reduced time-to-market

Ensured competitive advantage

StrategiesEnable collaborative engineering

Consolidate product development data and documents

Reduce development effort and time-to-market

SAP® can help youIntegrate all product-related information

Reduce data redundancy and inconsistency

Integrate into manufacturing process

ChallengesAdapt to ever-changing consumer tastes and requirements

Develop product efficiently

Address increased demands for new products


Optimize Supply Chain

BenefitsImproved operations excellence

Lower capital commitment

Reduced operating costs

Higher customer satisfaction

StrategiesReduce costs

Streamline supply chain processes

Improve supply chain control

Gain more supply chain visibility

SAP® can help youOptimize distribution processes

Optimize end-to-end planning

Improve asset utilization

Fully integrate logistics management, including transportation and warehouse and inventory management

Shorten order-to-delivery cycles

ChallengesDecrease process costs

Create operational efficiencies and supply chain transparency

Manage shelf-life-based picking and distribution

Ensure accurate and timely shipments

Avoid out-of-stocks


Increase Efficiency in Procurement

BenefitsIncreased demand planning accuracy

Consistent internal and external procurement reporting

Integrated processes

StrategiesReduce costs

Streamline processes

Gain more visibility and transparency

Improve relationship with producers

SAP® can help youSet up integrated and flexible processes for procurement

Streamline raw milk collection and reception

Ensure integrated quality management

Track batches

ChallengesCope with ever-changing quantity and quality of the raw milk

Manage complex payment conditions

Cope with seasonal fluctuation

Create operational efficiencies and transparency


Optimize Manufacturing

BenefitsImproved asset utilization

Increased profitability of produced product mix

Consistent cross-stages monitoring

Integrated processes

StrategiesMaximize raw material utilization

Increase demand planning accuracy

Streamline processes

Gain more visibility and transparency

SAP® can help youSet up integrated and flexible processes for manufacturing

Monitor raw material utilization and losses

Ensure integrated quality management

Track batches

ChallengesBase plans on a non-standardized raw material

Define optimal product mix

Create operational efficiencies and transparency

Optimize production


Ensure Food Safety and Regulatory Compliance

BenefitsReduced penalty risk

Decreased risk of food-safety compensation payments

Reduced risk of bad reputation

Lower operating costs

StrategiesSupport mid- and long-term company success by ensuring regulatory compliance

Set efficient processes in place to enable traceability

Allow targeted product recalls to minimize costs

SAP® can help youTrack, monitor, and trace batches and inventory

Streamline procurement, production, and sales

Manage sales returns

Enable targeted product recalls

ChallengesAlign with governmental regulations (EU 178/2002, the U.S. Bioterrorism Act of 2002, import/export)

Enable fast, effective product recalls

Track and trace from “cow to consumer”


Improve Sales Efficiency

BenefitsHigher sales volume

Better account retention

Closer customer relationship

Optimal sales force operation

Higher customer satisfaction

StrategiesObtain first-hand information about the market

Optimize process settlement in sales

Increase customer service offerings

Increase customer satisfaction

SAP® can help youPlan, track, control, and optimize sales performance

Expand service processes

Strengthen collaboration with partners and key customers

Track indirect sales and customers

Ensure correct handling of rebates

ChallengesProtect market share

Meet increased service level expectations of customer

Get visibility in the sales process

Manage quality-based price determination for raw material sales


1. Challenges, Strategies, and Benefits




Bus

ines

s O

bjec

tive

s Define business strategy and goals

Understand company performance and profitability

Realize savings in aggregate purchasing

Improve purchasing efficiency

Ensure tracking and traceability

Improve manufacturing efficiency

Ensure quality management in manufacturing process

Establish closer contact with customer

Enhance control over delivery process

Improve marketing effectiveness

Increase sales effectiveness

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


Complete logistical and financial integration

Analyze, Plan, and Develop

Procure Manufacture Marketand Sell

Deliverand Service

Key Performance IndicatorsPurchased Raw Materials Volume – Value

Warehousing/Distribution Costs

Route Settlement Time

Gross Profit/Total Net Sales

Sales Volume Growth

Inventory Turns


Suppliers & Partners

Customers (e.g. Retailers) &

Channel Partners

Analyze, Plan & Develop Procure Manufacture Market & Sell Deliver & Service

Sourcing & Procurement Milk Procurement from Producer

Additional Raw Material Procurement Procure to Stock

Internal Procurement

Product Development

Recipe Management

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

Accounting Product Cost Planning CO-PA for Consumer Products Cost Object Controlling


ManufacturingDairy Production

Planning Dairy Process Control


Suppliers & Partners

Customers (e.g. Retailers) &

Channel Partners

Analyze, Plan & Develop Procure Manufacture Market & Sell Deliver & Service

Sourcing & Procurement Procure to Stock



Returns







Generic Food Scenarios


Supports price comparison of vendors’ offers Provides tools to gain greater spend visibility in procurementHelps to manage quotations, contracts, batch handling and quality

Suppliers & Partners Customers, Consumers, Channel

Partners

Analyze, Plan & Develop

Procure Manufacture Market & Sell Deliver & Service Suppliers & Partners Customers, Consumers, Channel

Partners


Procure Manufacture Market & Sell Deliver & Service


Third Party


Third Party

Plan & Manufacture

Production Planning Production

Plan & Manufacture



Direct Store Delivery (DSD) Rebate & Bonus Management

Commissions Indirect Sales

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



Procure to Stock

Industry Pain PointsImproving purchasing activities efficiencyRealizing savings in purchased valueAllowing visibility on vendors’ conditions and servicesEnsuring tracking and traceability

Business BenefitsAutomate operational tasks Improve vendors’ selection and prices comparison through quotation handling Formalize agreements by contract managementGuarantee quality check through goods receipt inspections

SolutionProcurement of Stock materials

Procurement –Contracts

Request for quotationPrices ComparisonPurchase requisitionPurchase order processingGoods receiptInspect goodsBatch number assignmentStock updateInvoice verification

Create contract: Quantity contracts; Value contracts; Delivery scheduleCreate purchaserequisitionAssign vendor tocontract



Industry Pain PointsImproving internal purchasing activitiesEnsuring tracking and traceability

Encompasses cross-plant internal procurement of products including creation of all required documents for both with or without deliveryProvide functions to monitor stock in transit

Business BenefitsAutomate operational tasksIncreased visibility of stock and stock transfers

SolutionStock transferwith delivery

Stock transferwithout delivery

Create stock transport orderProcess deliveryPost goods issue

Create stock transport orderPost goods issue


Partners



Partners




Third Party


Third Party

Plan & Manufacture


Plan & Manufacture



















Manage the entire customer order process — variable pricing, delivery, invoicing, and payment. Includes Electronic Data Interchange (EDI), handling of consignment sales, and foreign trade


Partners



Partners




Third Party


Third Party

Plan & Manufacture


Plan & Manufacture


















Sales Order Processing

Industry Pain PointsManaging variable pricing conditions Long order cycle timesMeeting customers’ requests for improved services Managing sales returns cost effectively

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

Solution

Sales Distribution

Process sales orderBilling Payment

Picking & distribution based on shelf life expiration dateFreight settlementHandling unit mgt.

Inbound/Outbound EDI Processing

Inbound sales order via EDIOutbound billing document via EDI


Focuses on the processing of credit memos if no goods are sent back.Includes quality evaluation for returned goods and appropriate stock movement.


Partners



Partners




Third Party


Third Party

Plan & Manufacture


Plan & Manufacture


















Returns

Industry Pain PointsEfficient handling & document complaints.Managing sales returns cost efficiently.

Business BenefitsEnable corporate compliance strategyEffective batch-specific returns processing

Solution

Returns and Complains

Returns Processing

Process credit memosQuality evaluationGoods movementto blocked orunrestricted stock.

Ship palletsReturn pallets


Capability to track and trace products at all stages of production, processing, and distributionAllow fast and efficient recall of a defective product batch


Partners



Partners




Third Party


Third Party

Plan & Manufacture


Plan & Manufacture


















Traceability & Food Safety

Industry Pain PointsComplying with food regulations

HACCP (Hazard Analysis & Critical Control Points)EU (Article 18 of Regulation 178)US (the US Bio-terrorism Act 2002)

Addressing growing food-safety concerns from consumers

Business BenefitsProfessionally managing a possible product recallMinimize risk of non-compliance with food & beverage regulationsEffective batch-specific returns processing

SolutionQuality

ManagementBatch

Management

Quality planningQuality inspectionRecording of laboratory analysisQuality reportingQuality improvement

Batch creation and determinationBatch-where-uselists

Recall batches and create follow-up activitiesManage batch-specific return processingManage batches based on shelf life expiration


Consists of the whole procurement and delivery cycle with warehouse for the storage management, including quality inspectionReturn rejected goods to the vendor


Partners



Partners




Third Party


Third Party

Plan & Manufacture


Plan & Manufacture


















Inventory Management

Industry Pain PointsMaintaining low inventory levelsAvoiding out-of-stock situations at retailersEstablishing visibility to inventory levels throughout the entire supply chain

Business BenefitsReduce working capital by keeping inventory levels lowIncrease sales by reducing out-of-stock situationsImprove consumer retention due to product availability

SolutionInventory

Management

Integration with supply chain accountingGoods receiptGoods issuesManaging different stock categoriesInventory valuation

Transportation Management

Plan transportsMonitor executionCalculate costsManage transportationsettlement

Warehouse Management

Storage ManagementQuality ManagementQuality InspectionReturn of goods


Helps to get an insight into all aspects related to accounting and controllingProvides streamlined functionalities that allows visibility,increases productivity and regain control of their business processes


Partners



Partners




Third Party


Third Party

Plan & Manufacture


Plan & Manufacture


















Financials & Controlling

Industry Pain PointsMeeting local legal and fiscal requirementsImproving administrative activities efficiencyMaintaining focus on most profitable customers and brands

Business BenefitsImplement an ERP solution fully compliant and continuously updated with local legal and fiscal requirementsImprove efficiency in accounting activities due to a seamless process integrationEnhance company profitability analysis through profit and loss calculation

Solution

Financials Controlling

General Ledger accountingAccounts payable accountingAccounts receivable accountingBank accountingClosing activitiesCash managementAssets management

Standard cost and profit center accountingProfitability analysisProduct costs planningProduct cost controlling


Suppliers & Partners Customers (e.g. Retailers) & Channel

Partners



Our specific Solution Offering for the Dairy Industry


Returns



Food







Manufacturing

Milk Procurement from Producer Additional Raw Material Procurement

Product Development

Recipe Management

Dairy Production Planning & Process

Control

Raw Material Sales

Dairy


Managing the fast and efficient product development by structured re-usable product specificationsSeamless integration into the production planning and execution process

Product Development with Recipe Management

Industry Pain PointsSlow and inefficient product developmentChanging consumer tastes and requirementsIncreasing demand for new products

Business BenefitReduce development cycle time & costsEnsure company-wide consistent product informationReduce time-to-market to gain competitive advantage

SolutionProduct Data Management

Product Lifecycle Management


Partners





Product Development

Recipe Management Manufacturi

ng Dairy Production Planning

Dairy Proce ss Control


Raw Material Sales Indirect Sales

Di rect Store Delivery (DSD)

Operational End-to-End Scena rios Traceability & Food Safety


Cro ss Company Transactions


Controlling

Maintain product specificationsLabel ManagementMultilevel recipe mgt.Define Batch Management

Document ManagementChange ManagementIntegrate Recipe into production processCreate master recipeCreate process order


Encompasses the efficient procurement and collection of raw milkEnsure compliance with high quality standards and traceability requirementsCalculate payments based on quantity and quality characteristicsMonitor procurement and payment process

Milk Procurement from the Producer

Industry Pain PointsManaging the complex payment conditionsCoping with seasonal fluctuation and changing demandsComplying with the high quality standards and traceability requirements

Business BenefitsEnable accurate payment both for producer and transport service providerProvide payment reporting to the producerStreamline raw milk collection & reception process

Solution

Milk Collection Milk Reception Milk Analysis

Milk Payment Reporting & Analysis


Partners





Product Development











Controlling

Maintain standard routesProvide route list to truck driver

Dairy reception cockpitProcess purchase OrderAutomatic creation of inspection lot and batch numberBatch management

Gather results of inspection lots from producer samplesGather results of inspection lots from tank truck samplesCreate usage decision for inspection lots

Calculate payment for producerCalculate payment for transport service providerSettle paymentMaintain payment calculation scheme

Monitor raw milk quantity & quality characteristicsPayment reporting


Supports the additional purchase of raw materials from other companies on the determined shortage in the demand planning processCalculate vendor payment based on the raw material quantity and quality characteristics.

Additional Raw Material Procurement

Industry Pain PointsDetermining demand for additional required raw material due to ever-changing quantity and quality of collected raw milkManaging the vendor payment based on raw material quality characteristics

Business BenefitsIncrease demand planning accuracyHandle the quality-based payment for the vendor

SolutionRaw Material

Demand Planning

Raw Material Reception

Raw Material Analysis

Raw Material Payment

Reporting & Analysis


Partners





Product Development











Controlling

Determine required additional raw materialsCreate purchase order

Post goods receiptAutomatic creation of inspection lot and batch numberBatch management

Gather results of inspection lotsCreate usage decision for inspection lots

Calculate vendor payment for additional purchased raw materialSettle paymentMaintain payment calculation scheme

Monitor raw material quantity & quality characteristicsPayment reporting


Manage the multilevel manufacturing processes including seamlessbatch and quality managementIncorporates the ever-changing quantity and quality of the raw materialProvide powerful tools to gain a cross-stages raw material controlling

Dairy Production Planning & Process Control

Industry Pain PointsProduction Planning based on a non-standardized raw material High cost of the raw material comparing to the total production costsDefining optimal product mix in order to maximize utilization & profitablity

Business BenefitsOptimize and streamline production processIncrease profitability by improved visibility to raw material utilization and lossesComply with the high quality standards and traceability requirements

SolutionProduction Planning Process Control Quality

Management

Controlling & Analysis


Partners





Product Development











Controlling

Demand planning based on historical data Production planning synchronous to salesMaterial resource planning (without shelf-life)Simulate planningGraphical capacity planning

Maintain product master data & recipes for multilevel productionBatch management across all stagesSeparate raw milk into componentsMaterial valuationManage shelf-life expiration date for final products

Create inspection lots for semi-finished and finished goods Gather results of inspection lotsCreate usage decision for inspection lots

Cross-stages raw material controllingProduct costingBatch information cockpitProduction information system


Supports the sales of raw materials between dairies based on the raw material requirements and the available surplusesPricing and distribution are based on the raw material quality characteristics

Raw Material Sales

Industry Pain PointsManaging variable pricing conditions based on quality characteristics

Business BenefitsSimplify price determination by using the integrated batch and quality management systemImprove sales execution timeline

Solution

Production Sales Distribution

Billing


Partners





Product Development











Controlling

Manage process orderCreate inspection lot

Process sales document

Picking based on quality characteristics Create inspection lot for picked raw materialUsage decision and goods issue

Invoice processingPrice determination based on quality characteristics


Reduce operating costs and increase efficiency

SAP ERP for the Dairy Industry Provides Increased Shareholder Value for Your Business

ShareholderValue

RevenueGrowth

Improve customer satisfaction

Increase sales

Reduce Cost

Reduce Working Capital

Customer service

Distribution

Inventory

Reduce Risk

Finance

Procurement

Production

SAP Scenarios(SAP ERP for the Dairy Industry)

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

Comply with food regulations

Improve order fulfillment

Improve sales execution timelineImprove customer understanding

Improve order fill rate

Improve efficiencies in accounting activities

Lower raw materials costs

Calculate and monitor production costs seamlessly

Business OpportunitiesBusiness AreasBusiness Objectives

Utilize full track-and-trace capability

Optimize inventory usage

Financials and Controlling

Sales and Customer Order

Manufacturing

Inventory Management

Food Safety

Indirect Sales

Returns

Procure to Stock

Increase efficiency for sales returns

Milk ProcurementImprove transparency in dairy procurement

Improve yield and reduce waste

Product Cost Controlling

Enable detailed profitability analysis

Realtime access to production cost information

Raw Material Sales

Recipe Management






Why SAP™ ERP Packaged Solutions?

I know that SAP® software can be tailored in a very flexible way, but I really want to see proof that SAP understands the dairy business.

I’m not a large dairy company. The classical implementation is not the right thing for me. I need software that works immediately, ideally via a hosting or outsourcing partner.

What can you offer me in this way?

Sure, SAP can support me in my daily business, but I’ve heard it takes a lot of work to implement the software. I need to execute

today!

What does SAP have to offer that will spare me starting

from scratch?

The processes demonstrated here were just right for me.

Can I use them to leverage my global implementation in order

to save time and money?

I am already working with SAP software. How do the SAP

solutions fit together?


Reviewing the Packaged Solution Approach


FastProvenReliable

Low Risk Fixed Scope

SAPERP

packagedsolution

Fast ROI

+

+

mySAP ERP

SAP® Best Practices

Services

mySAP ERP 2004

SAP Best Practices++

• SAP’s next generation Enterprise Resource Planning solution

• Powered by SAP NetWeaver TM

• Designed for all industries• Fully integrated within the mySAP Business Suite

Services

• Best-in-class industry expertise built into SAP ERP

• Predefined end-to-end processes for the dairy industry

• Industry-specific documentation• Preconfigured System

•Preconfiguration settings•Master Data•Configuration documentation•Test catalogs

++• Deep dairy industry knowledge• Focus on value creation and risk reduction• Delivery excellence

Implementation


Composition of mySAP™ ERP

The next generation SAP®

enterprise resource planning solution

Powered by SAP NetWeaver

Designed for all industries

Fully integrated within the mySAP Business SuiteInsight to business processes and corporate compliance Adaptable business processes from end to endFlexible deployment of business processesEnhanced user productivity

mySAP ERPAnalyticsFinancials

Human Capital ManagementOperations

Corporate Services

SAP NetWeaver™

Com

posi

te A

pplic

atio

n Fr

amew

ork

Life Cycle M

anagement

PROCESS INTEGRATIONIntegration Broker

BusinessProcess Mgmt

INFORMATION INTEGRATIONBus. Intelligence

Master Data Management

Knowledge Mgmt

PEOPLE INTEGRATIONMulti-channel access

Portal Collaboration

APPLICATION PLATFORMJ2EE

DB and OS Abstraction

ABAP


Target

Traditional strategy for an implementation project

Implementation using best practices for SAP ERP

packaged solution

Basic Approach of SAP™ ERP Packaged Solutions

We know your concerns, risks, and business needs – and we know how to support them perfectly based on identifying and anticipating reusable business processes and project activities.

Get a living and fully documented prototype within days that you can

rapidly turn into a productive solution.

Conception and implementation of

customer processes

Conception and implementation of

customer processes

Best practicesusing mySAP ERPpackaged solution

Effective evaluationRapid implementationExplicit business expertiseImplementation instrument


SAP™ ERP Packaged Solution: The Components

Best-in-class industry expertise built into

Predefined end-to-end processesUse of customer languageIndustry-specific documentationDocumented business know-how

Definition and documentation of integrated, supplier specific business processes.

SAP ERP

Development of supplier specific Preconfigured Systems based on defined and documented business processes.

Subset

Suppliers & Partners Customer & Channels Engineering Procurement Manufacturing Sales & Distribution Customer Service

OEM Relationship Management Collaborative Engineering Key Account Management

Time-to-Market New Product Development & Introduction

Life-Cycle Data Management

Supplier Collaboration Strategic Sourcing

Operational Procurement & Inbound Logistics

Make-to-Order/Make-to-Stock Supply to Line

Manufacturing Execution Outbound Logistics

Enterprise Asset Management

Sales Order Management Demand & Order Scheduling

Order Execution & Receipt Settlement

Customer Service Warranty Management Service Parts Planning

Service Parts Fulfillment

Enterprise Management & Support Analytics Financials

Human Capital Management Corporate Services Operations Support

Suppliers & Partners Customer & Channels Engineering Procurement Manufacturing Sales & Distribution Customer Service

OEM Relationship Management Collaborative Engineering Key Account Management

Time-to-Market New Product Development & Introduction

Life-Cycle Data Management

Supplier Collaboration Strategic Sourcing

Operational Procurement & Inbound Logistics

Make-to-Order/Make-to-Stock Supply to Line

Manufacturing Execution Outbound Logistics

Enterprise Asset Management

Sales Order Management Demand & Order Scheduling

Order Execution & Receipt Settlement

Customer Service Warranty Management Service Parts Planning

Service Parts Fulfillment

Enterprise Management & Support Analytics Financials

Human Capital Management Corporate Services Operations Support

Preconfigured System

PreconfigurationsettingsMaster dataConfigurationdocumentationTest catalogsWorkshopcontent


Key ERP Processes for CP – Service Offering

End-user training

Automated data migration

Custom forms, reports, and interfaces

Custom authorizations

Hosting

Financing

Change management

Post-implementation support

Off-shore components (e.g., data migration, custom reports)

Data archiving

Operational concept

Project management

Delta requirements workshops

Implementation of defined scope

Technical installation of system

Key-user training on the job

End-user documentation

Predefined sheets for data migration

Predefined test catalogs

Predefined forms and printouts

Go-live support

OptionsIn basic scope*

Consulting Deliverables

* Deliverables in English


Benefits

Clearly defined scope and time framePreconfigured end-to-end business scenariosPredefined implementation

⇒ Reduces implementation time and costs

Fast

ReliableProven

SAP®

ERPPackagedSolution

SAP® Best Practices deliver proven business expertise to enhance competitivenessImplementation methodology and acceleratorsMore than 15,000 midmarket organizations have chosen SAP to enhance performance and efficiency

⇒ Optimizes business processes and ensures ROI

World-class enterprise resource planning solutionState-of-the-art technology and scalabilityOver 30 years’ industry experience, financial viability, and strong R&D

⇒ A safe investment


What the Statistics Say

More than 60% of all mySAP™ ERP implementations are accomplishedin less than nine months.

< 9 months> 9 months

Implementation

Recent implementations of SAP® solutions at midsize companies have averaged only 13 weeks.

010-11weeks

12-13 weeks

14-16 weeks

10

20

3025%

40%35%

40

Average implementations for midsize companies are measured in weeks.

SAP is already successful in the food midmarket.

Food customers by no. of employeesRange of Employees

X-Large

Large

Local

Small

Total

> 25,000

5,000-25,000

1,000-4,999

< 1,000

469

592

338

1.399


1. Challenges, Strategies, and Benefits




SAP®: The Smart Choice for Your Global Business

12 million users. 69,700 installations. 1,500 partners. 28,900 people in more than 50 countries. 27 industry solutions. $7 billion in revenue and more than $1 billion annually in R&D.

SAP is the recognized leader in providing collaborative business solutions for all types of industries and for every major market.

SAP is the world’s largest interenterprise software company and the world’s third-largest independent software supplier overall.

SAP will continue to provide you with solutions for all future trends to protect your investment.


Fast, Predictable Payback

Implement what you need, when you need

it, with SAP. Time

Cash Flow

AccelerateTime-to-Benefit

Shorter Payback

Time

Reduce Initial Investments

Supports future growthDelivers business value through theservice providers that best fit customer needs:

Customers can choose familiarindustry partnersCustomers can choose SAPif needs dictate

Addresses key business issues from an industry-specific perspectiveLimits business disruption through predefined services focused on industry best practicesProvides real ROI within budget and timeline Enables customers to buy only the modular functionality they needLeverages and extends existing investments;customer decides what to add or replace

SAP’s phased implementation approach provides the following benefits:


SAP® R&D Investment

R&D Investment (€ Millions)

“Importantly, the stronger margin does not appear to be coming at the expense of future growth – R&D head count is up Q/Q and Y/Y, and S&M head count is down marginally quarter-on-quarter and up year-on-year – both indicating that capacity and product investment are not being curtailed.”

Solomon Smith Barney


SAP® – The Right Short-, Mid-, and Long-Term Choice

Q2 2000-Q1 2001

Q3 2000-Q2 2001

Q4 2000-Q3 2001

Q1 2001-Q4 2001

Q2 2001-Q1 2002

Q3 2001-Q2 2002

Q4 2001-Q3 2002

Q1 2002-Q4 2002

Q2 2002-Q1 2003

Q3 2002-Q2 2003

SAP AGSiebel*Oracle **PSFT&JDEC*I2*

Q4 2002-Q3 2003

Total License Revenue: Relative Market Shares(Rolling four quarters, based on license revenues)

* Forecast by financial analysts (I2, PSFT&JDEC, SEBL)** Fiscal year is not calendar year; comparison based on most recent quarter (e.g., SAP Q1 vs. Oracle Q3)

Source: CMI analysis based on company data and financial analysts estimates as of January 20, 2004

59%

16% 15% 15% 14% 13%

2%

58%56%54%

51%48%

46%44%43%

41%40%40%

11%12%12%13%

16%

18%18%20%20%21%22%21%

14%15%

14%15%

19% 17% 18% 17%

16% 16% 16% 16%

17%18% 14%15%

17%17%17%

2%2%2%2%2%3%3%4%4%5%4%

0%

10%

20%

30%

40%

50%

60%

Q1 2003-Q4 2003E


The SAP solution for the dairy industry is based on 20 years of industry experience.

The SAP solution for the dairy industry is proven by over 100 dairy customers worldwide.

SAP is working with the best in the food industry. 6 of the top 10 dairy companies are SAP customers.

SAP® in the Dairy Industry


What the Customer Community Is Saying

When you produce food, there is a holding time before you get the lab results that authorize release of goods. This is very easy to track in the SAP® solution – everything is stored by a batch date, so we can quickly access how much product we have on board, where it is, the date we produced it, and when it is ready for release.

Instead of having data with significant delays, as it happened before, we can now have them at our disposal with the desired speed and quality.

Morgan Foods looked at many software packages, and as we continued looking and continued learning, we were very amazed at SAP’s breadth of technology and capabilities to control.

“Ryan Peralto, General Manager

“Robert Schlingensiepen, Managing Director

“Dan Slattery, Vice President and Chief Financial Officer, Morgan Foods


SAP® Customer Examples in the Dairy Industry

http://www.leerdammer.com/leerdammer/frontoffice/flash/index_DotCom.html?pageId=113&nodeId=41&languageId=3

http://www.garciabaquero.com/

https://sapmats.wdf.sap.corp/../../../../../../../../TEMP/40251/FREDERICKS DAIRIES.pdf

http://www.campina.com/DE/first.asp


Deloitte Is Your Partner for Success

37,000 business consultants. 5,000+ dedicated SAP practitioners in +35 countries, 1,600+ clients, more than 50% of our SAP consultants have 10+ years of experience, 1,200+ live installations worldwide

Deloitte is the recognized leader in providing quality SAP implementation services for all industries.

Deloitte is dedicated to the development of true partnershipswith food and beverage companies – we work with our customers not just for our customers.

Deloitte will measure its success by the value created for food and beverage companies – our approach is value-driven and focused on creating immediate results for the organizations we work with.


The Overall Objective for the Deloitte/SAP Alliance Is to Create More Value for Your Dairy Company

+The world’s leading provider of business solutions

Solution Package

World-class integrated solutionsPreconfigured processesFood-specific prepackaged solutionsFast installation

The market’s leading business advisors and system integrators

Service Package

Deep industry knowledgeCXO relationships Delivery excellenceDefined scopePredefined effortGlobal project experiences

Effective response to changing market conditions

Customer Value

Maximizing operational effectiveness Shorter implementation projectsMinimizing riskLower TCODecreasing project costsHigher shareholder value

= ☺


Extensive Experience with SAP® Implementations

Implement SAP packaged solutions in time, within budget, and with full

benefit realization!

Successfully implementing SAP solutions – and extracting full value from an implementation – isn’t just about technology. It’s about focusing in on business value drivers.Deloitte has a reputation for delivering successful, business-drivenimplementations with low risk.Deloitte provides a robust set of tools, solutions, and methodologies to complement SAP’s business solutions .

As a leading SAP partner, Deloitte offers a complete range of implementation services:

Business case developmentSystem designConfigurationTestingDeployment

Complementary services in tax, finance, HR, assurance, and riskVast experience in delivery of solutions and services to the middle market

Working with Deloitte is the first step toward a successful SAP implementation for your organization:


SAP® Consulting: Your Partner for Success

More than 10,000 consultants around the world,32 years of SAP implementation experience

SAP Consulting delivers value to your business based on measurable results …

SAP Consulting is well-known for its excellent competence and experience in implementing SAP solutions within the core areas of the food and beverage industry (“SAP knows SAP best”).

Decades of SAP Consultants’ project experience have been merged into the SAP ERP packaged solution for the beverage and food industry.

Pragmatic project approach tailored to the needs of the midmarket:Short project durations due to experienced consultantsCustomer enablement instead of dependency from consultantsEfficient remote consulting modelSAP’s offering also includes financial and/or hosting services

SAP Consulting


SAP® Solutions and SAP ConsultingCreate More Value for Your Dairy Company

+The world’s leading provider of business solutions

Solution Package

World-class integrated solutionsPreconfigured processesBeverage-specific prepackaged solutionsFast installation

The industry’s leading provider of SAP implementations

Service Package

Deep industry and solution experienceImplementation approach tailored to needs of the midmarket SAP solution out of “one hand” (end-to-end solution provider)Highest quality and commitment due to our product responsibility

Effective response to changing market conditions

Customer Value

Maximizing operational effectiveness Shorter implementation projectsMinimizing riskLower TCODecreasing project costsHigher shareholder value

=SAP Consulting ☺


Customer Value Proposition of SAP® Consulting

First-hand knowledge of SAPbusiness and technology innovationsBest practice methodologies and project management to leverage the value of software investmentsGlobal presence and 30 years’experience with 69,000 installations in 27 industries

Expertise and capability to create and realize

business value

Commitment to reduce customer risk

Every SAP Consulting customermust be a reference for short time to value, low TCO, and realization of business benefits Constant engagementthroughout entire customer life cycleSAP has never let a customer down in 30 yearsCommitted to support customer’s push for self-sufficiency

Capability to leverage entire SAP ecosystem

Direct access to developmentLeverage SAP Customer Services Network knowledge and resourcesSupport and commitment to our partner ecosystem

SAP ConsultingIs a valued business partner to SAP’s customers,

ensuring the fast and enduring success of their SAP investment.

Unparalleled Motivation

Skills andCompetencies

LeveragePotential++

= Customer Success






Our Initiative for the Dairy Industry

Accelerated Time to ValueFlexible componentsRapid success: Implementation in less than 6 months

Industry Best PracticeMore than 20 years in business, with over 400 beverage customersNumber one enterprise software vendor in the world with more than $1B annual R&D

Preconfigured SAP SolutionsA combination of SAP’s core solution and our preconfigured market industry solution

Financing OptionsNo upfront investmentA 5- to 7-year financing deal

A full solution with low total cost of ownership, scalable to your needs! Low-cost implementations with deep industry skills, best practices, and preconfigured SAP components!


In Summary

SAP is flexible to grow with your businessAllows for increasing market share

Is scalable to your needs

Gives you operational visibility

Helps shorten time to market

Helps improve customer loyalty

SAP is quick to implement, with fast, predictable payback

Fixed-price, 16-week average implementation time

Phased approach and best practices

SAP is the smart choice for your investmentOver 20 years in business, with over 400 beverage customers

Number one enterprise software vendor in the world, with over $1B annual R&D

Documents

Dairy Presentation