Industry Segment Overview Packaging

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Industry/Segment Overview

Industry Mill ProductsIndustry segment Packaging


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SAP AG 2009. All rights reserved. / Page 2

Agenda

1. Industry context

2. SAP solution overview

3. Why SAP? Top reasons

4. SAP customers


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Agenda

1. Industry context



4. SAP customers


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Globaloperations

Intensifiedinnovation

Increased risk &regulation

Demandingcustomers

DecreasingProfits

Many mergersand acquisitions

Increasing global

activities

Lack of visibility inglobal supplychain

Disparate ITlandscape

Green Products

required

Packaging as key

productdifferentiator

Innovativepackagingrequired (lightweight, RFID,reusable, )

Financialregulationsincrease

Global tradeincreases

Environmentalregulationsincrease

Environmentalfriendly packagingrequested

Timeliness andagility forquotations anddelivery wanted

Services aroundproduct wanted

Rising energy,transportation andmaterial costs

Decreasing orstable prices

High cost of debt

Overcapacitiesand increasedcompetition

Key trends are Driving

Change in the Packaging Industry

Increasing customer demands, decreasing margins and global operations are driving the need forconstant innovation


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Customers are demanding more flexible business models and companies are innovating to support them

Rapid response to quotations and demand signals Innovative products & service around the product (e.g. design) Increased customer collaboration necessary

Customerorientation

Product leadership enables customer retention and margins Collaboration and product support across the entire life-cycle Innovation for product and processes across all supporting operations

Innovative productsand collaboration

methods

Operational cost control across the whole supply chain Visibility into the global value chain from request to delivery

Optimization of prices and margins

Continued focus onglobal operational

efficiency and margin

control

IT as the enabler for change and new business models

Flexible platform to adopt new lines of business or acquisitions Ability to scale required

Need for business

model innovation formargin growth

Products & processes that meet customers sustainability requirements Variety and scale of global regulations One-off temporary approaches put you and your company at risk

Compliance

The need for Constant Innovation is Affecting

Industry Business Models


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SAP AG 2009. All rights reserved. / Page 10 SAP AG 2009. All rights reserved. / Page 10

Typical CEO questions

How do I optimize operations and control costs?

How can I effectively manage the supply chain andtransportation network while utilizing materials and capacitiesefficiently?

How can I ensure profitability in a low-margin industry withmostly commoditized products?

How to build up customer satisfaction with a differentiatedproduct and service offering?

How do I increase visibility to customer behavior & needs?

How do I maximize employee productivity & leverage bestpractices globally?

How do I reduce compliance risk?

How do I ensure value from IT?

What does this mean for your Business?


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Poor Asset Performance

Low OperationalPerformance &Throughput

Poor TransportationScheduling

Poor Customer Service and noVisibility of Sales Revenues andMargins

Cumbersome Design Processes

Lack of Supply Chainand Operational Visibility

Ineffective Sourcing andSpend Management

Difficult to manage operations, track sales and schedule logistics; low visibility into productiondata from across the company results in poor decisions and sub-optimal performance

Inability to align performance objectives and processesreduce ability to execute; resulting in low profitability

Low visibility to operational data leads to inefficiencies

High ratio of unplanned versus plannedmaintenance resulting in lower reliability and

higher maintenance cost Inefficient resource utilization

Poor visibility into supply chain constraints and throughput rates

Insufficient ability to benchmark between global operations

Long exchange times of designs

Long time to market

Inadequate version management

Inefficient sourcingprocess and poor spendvisibility leading to stockouts

Low productionrates and quality

High stock levels

Insufficient

demand andsupply matching

Tracking of real-time costs notpossible

Inability to adjustproductionschedules

Poor integration oftransportationscheduling with salesand production,

Low visibility of shortterm changes intruck, ship and trainarrivals

High transportationcosts

Inability to timely react on quotations and demand signals

Inability to determine a competitive price

Low visibility on sales revenue and cash flow by commodity

Ineffective credit limit control leading to write offs



Improved spend visibilityenables better leverageof buying power

Efficient sourcingprocess ensuring in timesupply of critical items

Aligned performance objectives and processes increaseability to execute; resulting in higher profitability

Increased visibility to operations leads to improved processes

High Asset Performance

Improved OperationalPerformance and

Throughput

Adaptive TransportationManagement

Outstanding customer serviceand high visibility to salesrevenues and profitability

Improved Supply Chain Visibility

Accelerated Time-to-Market

Data is shared across the corporation; stakeholders have visibility to operations, resultingin more timely decisions, greater overall performance and increased profitability

Effective Sourcing andSpend Management

High ratio of planned maintenance, low ratioof breakdown maintenance

Increased asset availability and utilization Reduced maintenance cost

Minimized stock bymatching demandand supply

Flexible adjustment

of productionschedules

Integrated supplychain planning toincrease throughput

Full integration oftransportation schedulingwith Sales & Production

Dynamic rescheduling toreact to short termchanges in ship or trainarrivals

Control of transportationcosts

High visibility of sales revenue

Reduced penalty cost

Integrated credit limit checks leading to reduced write offs

Create timely and competitive quotations based on product attributes

Full visibility into supply chain constraints

Pro-active benchmarking across differentoperations

Real-time monitoring of manufacturing costs

Efficient customer collaboration

Version management



Agenda

1. Industry context



4. SAP customers



Improved supply chain visibility & controlReal-time visibility into supply chain and shop floor

End-to-end supply chain

visibility and control Full visibility into Supply Chain

constraints

Pro-active benchmarking acrossdifferent operations

Real-time monitoring ofmanufacturing costs

Customer examples

Stock rotation time reduced from 8weeks to 2 weeks

Reduction of working capital by 30%

Visibility into global inventory, supplychain and manufacturing operations

Multi-level inventory visibility andoptimization

Monitoring of manufacturing performanceand costs in real-time

KPI based process adoption andoptimization

Automated decision support duringProduction planning and execution basedon exceptions

Better decisions based oncurrent shop floor and supplychain issues

Cost efficient adjustments ofmanufacturing constraints

Enhanced service levels

Faster customer response

Improved order fulfillment

Better contract compliance

Key benefitsSolution enabled by SAP

12% increase of service level to 96%

90% reduction of late order items

66% stock reduction for raw materialsand components



Supply Chain Dashboards for Packaging Companies

Visibility for Rapid Sound Decisions at all Levels



Improved operational efficiency and throughputEnabling manufacturing and supply chain performance

Improved Operational

Performance andThroughput

Minimized stock by matchingdemand and supply

Flexible adjustment of productionschedules

Integrated supply chain planning

enabling higher throughput

Customer examples

keeps operating costs under control

Global supply planning and demand /supply matching

Product mix and profit optimizationconsidering price, costs and capacities

Integrating of production planning,scheduling and execution processes

What-if analysis of total supply chain

Integrated block planning

Integrated Trimming Tools

Reduced overall supply chain,production and material costs

Reduced inventory carryingcosts

Increase production flexibility

Shorter production lead timesand time to market

Enhanced service levels dueto faster customer response,improved order fulfillment andbetter contract compliance


99,99 % uptime of MES systemwith MII
http://www.rexam.com/index.asp?pageid=1



Manufacturing Dashboards for Packaging Companies

Cross Plant Visibility to Improve Operational Efficiency



Improving sales service and profitabilityEnabling sales efficiency

Outstanding customer service

and high visibility tosales revenues andprofitability

Create timely and competitivequotations based on productattributes

High visibility of sales revenue

Reduced penalty cost integrated credit limit checks

leading to reduced write offs

Customer examples

Increase customer and productProfitability with Vendavo PMM

Integrated management of sales quotas &production capacities using productattributes

Global availability check

Customer interaction & service levels

Customer information & contractmanagement

Price & Margin Management

eBusiness and service offerings

Faster response time tocustomer inquiries/quotations

Reduced Order to Invoicecycle

Enhanced sales efficiency

Improved customer andproduct profitability

High customer retention rate

High visibility on sales revenue


25% of all orders receivedelectronically

IT operation costs reduced by 30% to

0.72% (Industry Benchmark 1,5 %)



CRM Dashboards for Packaging Companies

Full Visibility into Sales KPIs



CRM Dashboards for Packaging Companies

Full Visibility into Sales Performance for Better Strategic Decisions



Accelerated Time-to-MarketImproved global communication and design processes

Accelerated Time-to-Market Efficient customer collaboration

Version management

Customer examples

Accelerated order fulfillment cycle timesthrough linking information collected duringestimating with the rest of the design andproduction process

Improved response time resulted in betterorder winning rate

Document management for integrating alldocuments in your work processes andmaking them available at any time.

Idea and concept management tocapitalize on every possible new productidea

Collaboration with internal teams andcustomers with product data andprocesses

Workflow management

Collaborative product development

Improve collaborate withcustomers to define productrequirements & specifications

Improved collaboration withcross-functional design andspecification teams

Decrease time to market byincreasing visibility


New business model enabledwith collaborative Design



High Asset PerformanceEnabling asset efficiency and reducing unplanned downtimes

High Asset Performance

High ratio of plannedmaintenance, low ratio ofbreakdown maintenance

Increased asset availability andutilization

Reduced maintenance costs

Customer examples

Focus on 20% of operationsthat cause 80% of downtimewith EAM and ReliabilityCentered Maintenance from

Meridium

Asset performance management

Integration of automation and controlsystems

Provides comprehensive reliabilitycentered maintenance and optimization

Integrated resource and portfoliomanagement

Integrated project planning andaccounting

Mobile asset management and RFID

Reduce # of unplannedbreakdowns

Improve equipment availability& efficiency

Increased return on assets(ROA)

Increased maintenanceproductivity

Reduced cost for emergencywork


Reduced costs due to replacement of acomplicated and error-prone process

Dramatically improved data quality byusing of mobile asset management



Adaptive Transportation ManagementEnabling global logistics

Adaptive Transportation

Management Full integration of transportation

scheduling with sales &production

Dynamic rescheduling to reactto short term changes in truck,ship or train arrivals

Control of transportation costs

Customer examples

Increase of delivery accuracy from 70%to 98%

Dramatically improvement of forecastsand confidence in decision making

Combined order quotation, receipt, andconfirmation, transportation planning,transportation execution, tracking, eventmanagement, and freight chargemanagement in one system.

Simple dispatching to complex routingoptimization

Complete asset visibility includingtractors, trailers/containers, and drivers.

Multiple tendering strategies

Reduction of overalltransportation costs

Optimized resource utilization

Lowest TSP costs

Punctual arrival

Increased visibility intoshipment processes

Improved delivery accuracy


1,000 fewer in-transit rail cars

33% improvement in revenue peremployee in the paperdistribution business

14 warehouses reduced to 6

Global Paper Company*

* Lar e multinational a er com an com an name must not be mentioned officiall



Improve compliance with various regulationsSupport for compliant manufacturing and organizational processes

Customer examples

SAP Solutions for Governance, Risk, andCompliance (GRC) provide corporategovernance & oversight, risk andcompliance management

SAP for GRC includes compliance withhealth & safety work procedures and SAPEC for emissions management

SAP GRC Global Trade Services (GTS)provides compliance with traderegulations and customs requirements

Reduced cost and risk ofcompliance

Faster and more accurateresponses to inquiries andincidents

Improved public image,

ensuring sustainable future forthe company

Key benefitsSolution enabled by SAPMonitor and manage

compliance, avoid legalliability Comply with regulations,

especially emissionsmanagement

Risks and compliancemonitored and managed withinoverall management reporting

Using SAP solutionsfor GRC and EC

Uses SAP ERPRecyclingAdministration totrack quantityflows ofpackaging

material

Easy compliance withthe packaging andWEEE legislation



Effective Sourcing and Spend ManagementEnabling global sourcing decisions and optimization

Effective Sourcing and

Spend Management Improved spend visibility

enables better leverage ofbuying power

Efficient sourcing processensuring in time supply of criticalitems

Customer examples

Reduce inventory levels and costs

Increase process transparency

Lower total processing costs

Spend analysis capabilities

Supports supplier evaluation

Automate contract preparation andapproval workflows

Integrated purchasing processes for

multiple spend categories

Supply-chain integration towardssuppliers

Strategic and collaborative sourcingand procurement

Enterprise-wide visibility forpurchasing demand & spend

Reduced processing time andadministration costspurchased items

Improved contract

management

Improve collaboration amongsuppliers

Improved relationship withstrategic supplier for keyprocurement categories


Reduce transaction costs andmaterial costs by using electronicpurchasing processes

Accelerating purchase processes



Agenda

1. Industry context



4. SAP customers


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Why Packaging Companies choose SAP

Industry leading solution is the standardacross the entire value chain

Broad adoption by the entire Industry beyond ERP

SAP supports Business Network Transformation

SAP Business Suite optimizes business and IT forefficiency, flexibility and insight

Complete end-to-end enterprise support



Customers and partners find synergies as they interact across the value chain

The entire value chain runs SAP

PackagingCompanies

Pulp & PaperSuppliers

Customers
http://dwdf030/mis_pi/IU_Mill/Customers_Prospects/I006788/Desktop/Kunden/Frantschach/Neusiedler%20WS/English/Key5_Messina_e.pdf


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Leading Packaging Companies Run

SAP for their Critical Applications

Go to Market Supply to Market Enterprise Management and Support

Company

Integrated

order mgmt.

And execution

Channel

mgmt.

Sales &

marketing

Sourcing &

procurement

Integrated

demand and

supply

planning

Global

regulatory

compliance

Corporate

finance

Financial

supply chain

mgmt.

Analytics HR

Siebel / Hyperion / PSFTSAP, I2 / SAP, SiebelPlanned with

OracleOthers / Homegr.

Industry leaders are leveraging SAP beyond ERP to address high-value industry scenarios


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Industry Business Scenarios Select Customers

Financial Excellence

Responsive Supply Networks

Superior Customer Value

Product & Service Leadership

Strategic IT

Leading Customers run SAP to Support

their Critical Business Scenarios

Industry leaders are leveraging SAP beyond ERP to address high-value industry scenarios


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SAP AG 2009. All rights reserved. / Page 35 SAP 2008 / Page 35

3. SAP Supports Business Network

Transformation

DisparateApplications

Email

Departmentalanalytics

SiloedEnterprise

EnterpriseResourcePlanning

Corporate Portal

OperationalAnalytics

Business Suite

User centricCollaboration

PerformanceManagement

Business ProcessPlatform

CommunityNetworks

Business NetworkPerformance andRisk Management

IntegratedEnterprise

Extended

Enterprise

BusinessNetwork

ProcessEnablement

PeopleInteraction

InformationAnalysis

Companies are moving beyond internal execution to optimize performance across a network of partnersand realizing value at each step to fund further transformation

*Source: MIT Research, 2007 and St. Gallen Research, 2008

Competitive Advantage

+10% labor

productivity+15% asset

utilization

+10-30%processefficiency*

+37% laborproductivity

+13% inventoryefficiency*


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4. SAP Business Suite optimizes Business and

IT for Efficiency, Flexibility and Insight

SAP Business Suite

NetWeaverIntegration

NetWeaverComposition

EHP

SRM CRMSCMPLM ERP

EHP

IndustrySolutions

Harmonized UI increasesend user productivity

End-to-End processesimprove business

effectiveness and ITefficiency

Enhanced application andidentity management improvesTCO and control

EnhancementPackages providesnon-disruptiveinnovation with lowerTCO

SOA enablement forprocess flexibility andbusiness agility

Embedded analyticsfor business insight

Built in industry best practicesimproves core process

performance

Continuous innovation resultsin improved performance for

all lines of business

The SAP Business Suite enables companies to drive flexibility and insight without reducing efficiency


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SAP provides the most comprehensive enterprise support offering

Single point of contact foryour SAP enterprise platformand beyond

Reduce risk through proactiveand reactive support services

24x7 service provided througha global support backboneincluding SAP and Partners

Global supportbackbone

Mission

critical supportand

Delivered viarun SAP,

SAP Enterprise SupportManages innovation and integration in SAP solution landscapes

Innovation andProtection of investment

Enabled by

end-to-end solution operations

in collaboration with the SAP Ecosystem

5. Reduce Risk and Lower TCO with

End-to-end Enterprise Support


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Minimize risk

Proven solution with embeddedIndustry best practices

SOX and Industryregulations compliant

Growth and profitability

7x the mission critical apps run bySAP than any other company

All of top 10 global packagingcompanies and a great number ofmidsized packaging companies run

SAP

Enable business strategy

Innovation without disruptionleveraging a stable platform

Continuous solution enhancementsbased on customer needs

Why SAP?

Reduce operating costs

The strongest industry value network

Reduce TCO with:

A stable and flexible platform

Industry best practices

End to End Enterprise Support


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Agenda

1. Industry context



4. SAP customers


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Increased productivity more than 1% Reduced parts inventory by 30%

Winning orders that would have been lost because of slow responsetime and enhanced customer satisfaction

Accelerated order fulfillment cycle Enhanced information visibility for executives

Stock rotation time reduced from 8 weeks to 2 weeks Reduction of working capital by 30%

Reduced cost of ownership and increased value of SAP applications Rapid issue resolution through service-level agreements

Decreased cost of production via better order scheduling and reducedinventory

Improved visibility into end-to-end business processes Significant support of business growth and acquisitions

SAP Driving Customer Value:Selected Packaging References


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PROJECT OBJECTIVE

Seamless integration of estimating through billing for rapid estimating and order fulfillmentcycle

Complete online visibility of real-time information across the enterprise

Create base for R/3 internet application components to even further cycle time reduction andtighter linkage with customer

KEY CHALLENGES

THARCO needed to create a rapid, accurate estimating system so it would not losebusiness to competitors because it was unable to provide customer quotes on the phone.

De-fragmented system landscape

WHY SAP SOLUTION WAS SELECTED

Strong manufacturing capability

Ability to handle THARCOs four diverse businesses custom corrugated packaging,custom foam packaging, stock box line, and distribution

BUSINESS VALUE REALIZED

Winning orders that would have been lost because of slowresponse time and enhanced customer satisfaction

Accelerated order fulfillment cycle times through linkinginformation collected during estimating with the rest of thedesign and production process

Enhanced information visibility for executives, especially the

president, who access R/3 daily to track the business

THARCO manufacturescorrugated boxes of all sizes,shapes, and strength, as well asfoam/plastic inserts that go intopackaging solutions.

Before, we needed extremely

knowledgeable and experienced

people to perform estimates

we now have customer service

people who can take a very small

set of data elements box style,

board type, and dimensions and

with a few keystrokes and mouse

clicks generate an estimate whilethe customer is on the phone

Bill Picton

MIS director at THARCO

Sales: $200 millionEmployees: 1000

Customer references

C t f


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Customer references


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R R SAP S i d A t


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Rexam Runs SAP Service and Asset

Management

SAP plant maintenance module tightly integrated realtime with other business processes

Simplified user interface for all levels of employees

Increased productivity more than 1% Preventive maintenance has significantly enhanced

manufacturing uptime

Reduced parts inventory by 30%

Developed parts standardization and best practices

With the benefit of SAP solutions, we have built world-

class business manufacturing processes that have drivensubstantially increased operational efficiencies across

our American plants.

John NiemzykVP of IT and CIO,Rexam Beverage Can North America

Company Rexam Beverage Can

North AmericaLocation Chicago, Illinois

Industry Mill Products

Products/Services Consumer beveragepackaging

Revenue $2 billion

Employees 2,300

www.rexam.com

Factory machinery ideally runs 24/7; breakdowns anddowntime create substantial expenses across 15 plants

Increased focus on lean manufacturing

Improve equipment reliability and uptime to increase plant

efficiency Reduce maintenance costs and parts inventory

Move from reactive to proactive maintenance

Implemented SAPPlant Maintenance, Project SystemIntegration, Materials Management for the Storeroom, andRF using SAP Console in 24 months across all plants inNorth America

Project stayed within budget and realized ROI in two years

P l C ti


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Perlen Converting

SAP


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SAP

The Partner of Choice

The right products

Solution offering with generic and industry specific functionality

Complemented by ISV solutions

Scalable technology platform

Experience

More than 35 years industry experience

All of Top 10 Pulp and Paper companies worldwide run SAP

Over 850 customers

Implementation expertise delivered through SAP & partners

Commitment

Industry focus Global Industry Business Unit Mill Products & Mining

Customer driven co-innovation

SAP user workgroups

Executive Advisory Council for Forest, Pulp & Paper

Industry Value Network for Forest, Pulp & Paper

Documents

Industry Segment Overview Packaging