Delivering Value Through

Enterprise Resource Planning/SAP Business Suite Application

Sharp Electronics Corporation

Amelia Mezrahi

Director of IT

About Sharp

• Sharp Corporation is a Japan based international consumer electronics company with subsidiaries world-wide.

• Sharp Electronics Corporation (SEC) is a US based company that purchases product from Sharp Corporation, Japan, and has manufacturing and distribution facilities in US, Mexico, and Canada.

• SEC produces products across multiple business units primarily focused on selling consumer electronics, mobile and IT solutions, Professional business systems, microelectronics, and solar systems.

•Products are sold through retail, dealer and business/OEM channels.

• Sharp uses primarily the SAP suite of applications across all organizations and locations since 1997 when the first implementation was completed.

SAP Tidbits

• What does SAP stand for?

• SAP is currently:a. The largest software company in the worldb. 3rd largest software company in the worldc. 5th largest software company in the world

• Number of SAP customers :a. 525,100 b. 3400 c. 21,600

Airport Banner

• Berkshire Grocery selects SAP to integrate Financial, Human Resources, and /manufacturing … January 2004

• Study shows Korean-based consumer products company, CJ Corp achieved double-digit returns with CRM/SAP …December 2003

• Volkswagen drives productivity & profitability with SAP Product Lifecycle Management, Financials, Logistics, Production and CRM.

…December 2003– CRM for streamlining spare parts fulfillment and collaboration across dealership network– PLM for electronic bills of material in order to reduce cost across engineering and

production operations– Link production, financial and logistics to increase transparency and efficiency across

motor assembly operations…

• SAP chosen by Novartis for its global IT strategy ….June 2003– Replacing legacy systems across 50 countries, creating new efficiencies for research and

development, managing HR, supplier relationships, production and supply chain processes.

End-to-End Enterprise Integration

• Execute and integrate business activities across the enterprise that enable the firm to deliver the right product to the right place at the right time at the right cost

Customer Relationship ManagementMarketing, Field Service, Sales

Financial ManagementHuman Resource Management

Financials

HR

OperationsCorporate Services

AnalyticsStrategic Enterprise

ManagementFinancial Analysis Operations Analysis Workforce Analysis

Financial Accounting Mgmt AccountingFinancial Supply

Chain MgmtCorporate Governance

Employee Life CycleMgmt

Transaction Mgmt Self-Service Workforce Deployment

Travel MgmtEnvironment, Health,

SafetyIncentive &

Commission MgmtReal Estate Mgmt

ProcurementInventory &

Warehouse MgmtManufacturing

CustomerService

Sales Order Mgmt

Transportation

Sales

Services

MarketingMarketing Planning

CampaignMgmt

Trade Promotion Mgmt

PerosnalizationLead Mgmt

Sales PlanningForecasting

Customer Service& Support

Resource Planning

ProfessionalServices

Service OperationMgmt

Sales PlanningTerritory

MgmtAccount &

Contact MgmtIncentive,

CommissionContract

MgmtOpportunity

Tracking

Life CycleCollaboration

Quality

Life CycleData Mgmt

Document Mgmt

Product Structure Recipe MgmtChange & Config

MgmtIntegration

Quality Engineering Quality Assurance Quality Improvement

Idea Mgmt Design Colab.Collab. Project

MgmtContentMgmt

AnalyticsQuality Collab

ERP Solution Map

Customer Relationship Management Solution Map

Product Life Cycle Management Solution Map

Solution Maps

Features and Benefits

• Delivers analyses and evaluations for planning and controlling activities to improve performance• Supports decision making with simulations to improve responsiveness to change• Helps management recognize and capitalize on opportunities to create value in daily business

and thereby increase the value of an organization• Helps to monitor all financial transactions in real time for more accurate/timely information• Offers extensive corporate governance support, including Sarbanes-Oxley compliance and

Transparent financial reporting, reducing risk of noncompliance• Simplifies processing of incoming & outgoing payments, ensuring improved cash flow• Combines planning, reporting, and analysis of competitive measures in one process to provide a more

informed business analysis• Provides tools for measuring & optimizing the performance of important tasks to increase productivity• Provides an extensive range of services and processes for effective human resources management,

including employee transaction management, employee life-cycle management, recruiting, training, employee relationship management, employee self-service, and HCM analytics, resulting inimproved staff productivity and retention

• Strengthens the logistical capability in procurement, production, storage, transportation, sales and distribution,and maintenance to create a more efficient, streamlined business

• Forms the basis for cross-organization enhancement of business processes and collaboration with vendors,customers, and other partners, improving the utilization of assets

• Supports centralized and decentralized organizational services in areas such travel management, treasury, incentive and commission management, and environment, health, and safety, minimizing costs and optimizing sales performance

Functions BenefitsAnalytics

Financials

HR

Operations

Corporate Services

Two different ways to determine what to target:

A Diagnostic Approach- When unsure of what business process to target, we can employ a diagnostic approach to financial and operational metrics.

What to Target ?

What to Target ?

Two different ways to determine what to target:

A Prescriptive Approach- Through this approach, we target business processes, quantify improvement through operational metrics that impact financials

IT Business Value

Align IT Projects with Shareholder Value and Strategic Objectives.

Cost Perspective • IT Costs /Budget - Hardware, Software,

Networking, Staff, Services

• User Costs - Fully loaded costs of active users

• Downtime Costs - Value lost due to downtime & disaster exposure

• Opportunity Costs - Application maintenance opportunity costs

Value Perspective /Business Contribution– Improved productivity

– Incremental revenue generation

– Lower business costs

– Reduced risks

COST

VALUE

Application Value FrameworkCost Vs. Value

Project Portfolio Snapshot

Supply Chain and SAP Projects

Ref

Project Title

BU/Lead

Priority

Cat

Project Description Business BenefitTotal Cost

CapitalExpen

se

MIS Effort (Days)

CAP

OC

T

NO

V

1

SMA SAP Implementation Phase Baseline (Does not include Fabless)

BU - SMA Marck

H

SM

A

The Implementation Phase for SAP Implementation of SMA division for Baseline. The Implementation includes SD/MM/FI/CO BW, DRM for high tech and APO Demand Planning in 4.6 environment. The Fabless phase w ill be a second phase to start six months after Baseline

*Mainframe retirement *One SAP environment for all BU s (except SSG)*SMA’s end-to-end visibility across order to cash, Finance, inventory*Improve month end closing*Integrated distributor channel process for S&D, price protection

###### 5,766,126 ####### 6900YES

33.0 33.0

2CPFR Supply Chain Improvement

BU - All Fuj

H

SE

C

Phase I - Focus is to establish an integrated demand planning process for CEG that w ould enable Sharp to execute CPFR and improve supply chain performance. In Colloboration w ith Japan, to develop APO system for CPFR and PSI process.

Collaboration w /Customer, improve forecastImprove on time and complete w ith strategic customer.Reduce cycle time in supply chain planning and PSIReduce effort

682,000 550,000 132,000 220YES

1.0 1.0

3

Point of Sales & Marketing Intelligence Reporting

BU-ALL

M

SE

C

"Bring in POS (Sell-thru) info and Market Intelligence information for various sources across the business into Business Warehouse in order to make this available to a w ider audience in the business units and to

- Improve reporting capability for market intelligence and POS - Integrate info into Planning, Forecasting and business/sales tools/process

61,000 36,000 25,000 60YES

0.1 0.5

Related costs

1

15 (+18 External)

Application Portfolio

Transactional

Info

rmatio

nal

Strateg

ic

Transactional- Process and automate basic transactions in order to boost productivity & reduce costs

Informational/Analytics -Provide information and analytics for managing the company.

Strategic - External-facing systems resulting in sales growth, competitive advantage, and stronger market position.

ERP SMA Implementation

Collab. Planning, Forecasting

Supply Chain Metrics

Profitability Analysis

Market Intelligence

Transactional

Warehouse Management

Transportation Planning

Web Order Entry/

Internet Sales

Order Pointing

Informational/A

nalytics

Strategic

Costs

Valu

e

IT E

fficiency

Business C

ontribution

-Improved Productivity-Lower cost-Better information flow/visibility-Global supply chain

-Standard Measures- Reduced efforts - root cause analysis& corrective actions

2.0 5%

- Hardware -Software-Staff-Maintenance

-Hardware- Staff

-Software-Staff

-Improve Profitability Analysis capability- More profitable sales

-Improve shipment processing;Reduce Costs-Improve shipment processing;Reduce Costs

-Better order cycle time - Revenue growth- Reduce costs-Improve on time & complete- improve out of region shipments

-Stronger Market positioning- ability to set better prices

-Software-Staff- Hardware

-Software-Staff

-Hardware-Staff/Dev

-Staff

-Staff

-Software-Staff

Key Projects Across all Areas of the Organization

1. Web Order Entry/Internet Sales – SALES 2. Mexico Warehouse Management System - LOGISITCS3. Latin America Group SAP Implementation- ALL ENTERPRISE4. Capital & Expense Request/Internal Order Tracking System- FINANCE5. Service Center Refurbishment Automation – CUSTOMER SERVICE6. Semiconductor Division SAP Implementation- ALL ENTERPRISE7. New semiconductor Start-up Green-Field Business 8. Traffic Claims System9. Collaborative Planning, Forecasting & Replenishment w/Retail customers10. New Deployment Toolkit to reduce out of region shipments/freight cost11. Circuit City Direct Ship and ASN for laptop Business Unit12. Supply Chain Metrics in Data Warehouse -for inventory, receipt and forecast accuracy,

customer service reporting & metrics13. Web Based Document Imaging – CUSTOMER SVC/SUPPLY CHAIN 14. Free Trade Zone and Customs System15. Customer Relationship Management Opportunity Tracking System – MKTG/SALES

Maintenance

Dev.

Maint.

Development

Value Transition

Order to Cash Sales Order Processing

BillingProcess Rebates

Process A/R

Deliveries and

Shipping

DRM – Price Protection

DRM – Ship & Debit

Finance G/L Accounting

Asset Manage-ment

Valuation and Closing

ControllingAccounts Payable

Clearing Taxes

Procure To Pay Planning ProductionInventory

ManagementProcurement A/P

Master Data Management

FinanceMaterial

Management DRM

Sales and Distribution

APOMaterial

Management

Process Solution Map

APO Integrated Demand Planning Integrated Supply Planning

BW

Semiconductor Division Implementation

Module ScopeCore Processes to SAP Modules Map

Core Processes

SAP Modules

Sales & Distribution

(SD)

Sales & Distribution

(SD)

Distributor/ResellerManagement

(DRM)

Distributor/ResellerManagement

(DRM)Controlling

(CO)

Controlling (CO)

Materials Management

(MM)

Materials Management

(MM)

• Sales / Returns• Credits / Debits• Billing /

Invoicing• Rebates• Contracts /

Quotations• Deliveries /

Credit Control

• Sales / Returns• Credits / Debits• Billing /

Invoicing• Rebates• Contracts /

Quotations• Deliveries /

Credit Control

• Distributor Price Protection

• Ship and Debit• Claims

management

• Distributor Price Protection

• Ship and Debit• Claims

management

Financials (FI)

Financials (FI)

• A/P• A/R and Credit• General Ledger• Fin Reporting• Asset Mgmt

• A/P• A/R and Credit• General Ledger• Fin Reporting• Asset Mgmt

• Cost CenterAccounting

• Internal OrderAccounting

• Profit CenterAccounting

• Cost CenterAccounting

• Internal OrderAccounting

• Profit CenterAccounting

• Purchasing• Inventory Mgmt• Valuation• Invoice

Verification

• Purchasing• Inventory Mgmt• Valuation• Invoice

Verification

Master Data ManagementMaster Data Management

APOAPO

• Demand Planning

• Supply Planning

• Demand Planning

• Supply Planning

Security and ControlSecurity and Control

Business Warehouse ReportingBusiness Warehouse Reporting

MethodsMethods Practice

Aids

PracticeAids

Preferred Practices

Preferred Practices

Pro

ject

P

rep

ara

tion

Bu

sin

ess

B

lue

prin

t

Re

aliz

atio

n

Go

Liv

e

an

d

Su

pp

ort

Su

sta

in

Program Management

Business

Organization

Application

Eva

lua

tion

Fin

al

Pre

pa

ratio

n

Architecture

Operations

Project Lifecycle

Project Lifecycle

Key Milestone Alignment

Decision on hardware finalized and approved

Change Management Leader identified

Business Blueprint Validation Completed

High-level architecture design finalized and approved

Change Management and Training Strategy defined and approved

Target business designs finalized and approved

SAP Landscape design finalized and approved

Project Team Training Delivered (Realization)

Baseline configuration completed

Promote to Production Strategy finalized and approved

Training Environment prepared and approved

Final configuration completed

Development Environment prepared and approved – R/3, BW, APO

Organization definitions completed and approved

Security and Controls configuration completed

Test/Training Environment prepared and approved – R/3, BW, APO

Organization trained and ready for go-live

Integration test completed

Production Hardware installed and tested

Go/No Go review/decision

Program Team Structure and Milestones approved/Project Start

time

Technical

Process

Change Management

SAP 4.6 Sandbox with APO approved and prepared

R/3, BW, APO Production System Delivered to Functional Teams

Role definitions completed and approved

Support Organization Trained and Established

Knowledge Transfer to Support Organization Completed

Go-Live

Keys to SuccessCritical Success Factors

• Organizational commitment

• “Best” project resources committed full time to project activities

• Multi disciplined project team

• Business and Management model defined

• Measures of success defined

• Quick escalation procedures to support prompt decisions on critical business issues

• Project team empowered to make decisions on behalf of operating organizations

• Minimal turnover of project team members

• Active steering committee in place

• Change management process in place and supported

• Active Project Control and Management

Key Project Considerations

• Budget/Costs

• Business Value and ROI

• Scope

• Project Stages/Phases

• Timeline

• Project Team

• Location and Logistics

• Tools and Monitoring

• Stakeholder Communications & PR

Current Sharp SAP Environment

• ALL Sharp subsidiaries world-wide are integrated via SAP an ERP software system. This allows all departments within the company to use a common database effectively and efficiently for:– Supply and demand of product and parts for manufacturing – Demand and Supply Planning– Product Marketing– Inventory Control– Finance, Credit and Accounting– Order Processing– Warehouse Management and Logistics– “E-Sales”– Shipping and Delivery (Traffic)– Internal Purchasing– Model Master and Account/Customer Management– Reporting– EDI

• The Extended Enterprise Enterprise Integration within the four walls and extended partners

SAPR/3

APO/SCM

HR/TRNG

CRM

Portal Integration

So

urcin

g P

ortal

Fin

ancial P

ortal

MF

G P

ortal

S &

OP

Po

rtal.

Sales &

Mktg

Po

rtal

Lo

gis

tics P

ortal

Customers

Disti

Brokers

Supp.

Supp.

Supp.

HR

/Train

ing

Po

rtal

Metrics P

ortal

SEM

Business Warehouse InternalInternal

InternalInternal

Internal

Internal Other

Extranet and Intranet

Sharp Future State

Thank You!