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Finding the right WMS: A guide to the different types, the value, and your options to improve efficiency, throughput and cost September 6, 2012

Presentation of EWM Webinar With ARC Sept 6th 2012

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  • Finding the right WMS:

    A guide to the different types, the value, and your options

    to improve efficiency, throughput and cost

    September 6, 2012

  • 2011 SAP AG. All rights reserved. 2

    Todays Speakers

    Steve Banker

    Service Director, SCM

    ARC Advisory Group

    [email protected]

    Richard Kirker

    Solution Owner

    Warehouse Management

    [email protected]

    Andres Botero

    Global Lead

    SCE Marketing

    [email protected]

  • 3 ARC Advisory Group

    Warehouse Management Defined

    A warehouse management systems primary mission is to manage a ware-houses resources,

    including space, labor, equipment, tasks, inventory, and material flows. At ARC we define a WMS as a real-time solution that utilizes radio

    frequency, voice recognition, radio frequency identification (RFID), or real-time location

    systems.

    One of the Most Mature Enterprise Applications

    Over 30 Years Old

    $1.3 Billion Market Growing at Over 7% per year

  • 4 ARC Advisory Group

    Best Technologies for Reducing Costs in the Warehouse

    Over the past five years, which technology implementation has led to the greatest reduction in warehousing costs at either an individual warehouse or network of warehouses?

    1,9%

    3,8%

    5,8%

    5,8%

    7,7%

    9,6%

    9,6%

    13,5%

    42,3%

    0,0% 15,0% 30,0% 45,0%

    Other Material Handling

    Other Automatic Identification

    Other Software

    Automatic Storage and RetrievalSystems

    Conveyors and High Speed Sortation

    Inventory Planning Software

    Labor Management

    Voice Recognition Units

    Warehouse Management

  • 5 ARC Advisory Group

    Payback Period for WMS

    What was your payback period for this technology (brand new WMS or upgrade)?

    9,1%

    13,6%

    22,7%

    22,7%

    18,2%

    13,6%

    0,0% 10,0% 20,0% 30,0%

    Not yet obtained

    Greater than 3 years

    Between 2 and 3 years

    Between 1 and 2 years

    Between 6 months and 1 year

    Less than 6 months

  • 6 ARC Advisory Group

    WMS Solutions Exist on a Continuum

    SAP EWM is Best of Breed, SAP WM is a Mid-Range Solution

    WMS Continuum

    WMSLight

    WMSMid-Range Solutions

    Best-of-Breed

  • 2012 SAP AG. All rights reserved. 7

    SAP's Warehouse Management History (19942012) A long history of warehouse management business, process, and IT expertise

    1994 2006 2012

    SAP R/3:

    warehouse

    management

    functionality

    (SAP R/3 2.04.7)

    SAP Supply Chain Management (SAP SCM)

    SAP EWM application

    .

    Best-in-class

    warehouse

    management

    (SAP EWM 7.07.02)

    Advanced

    warehouse

    management

    (SAP EWM 5.0 5.1)

    Distribution

    center

    logistics

    Goods storage

    Logistics execution

    (SAP EWM 9.0)

  • 2012 SAP AG. All rights reserved. 8

    SAP WMS products: from ERP WM to EWM New generation warehouse process flexibility, performance and coverage

    SAP SCM Extended Warehouse

    Management

    (Strategic investment solution /

    strong roadmap)

    SAP ERP Warehouse

    Management

    (Continuous

    improvement /

    maintenance)

    Migration

    Tools

    Basic warehouse processes

    Simple warehouse operations

    Small & medium-sized warehouses

    Comprehensive warehouse mgmt. processes

    Full process transparency

    Flexible automated processes

    High performance, high volume warehouse operations

    Medium & large-sized warehouses

    Mid-Range Best-of-Breed

  • 9 ARC Advisory Group

    Factors to consider

    Starting point

    Any WMS or AutoID in place?

    Standard ERP across company in place?

    Cost

    TCO

    Type of warehouse (DC, spare parts, factory)

    No. of warehouses in network

    Complexity of warehouses

    Likely need for flexibility (downstream vs. upstream in supply chain)

    Integration considerations

  • 2012 SAP AG. All rights reserved. 10

    SAP Supply Chain Execution Platform

    SAP Event Management (Track & Trace)

    SAP Transportation

    Management

    SAP Extended

    Warehouse Mgmt.

    Supply Chain Execution Platform

    Supply Chain Execution Platform

    Synchronized solution delivery

    SCE Suite implementation in 1 instance

    Out-of-the box SCE integration

    SAP ERP Order-to-Cash

    Procure-to-Pay

    Dangerous Goods Mgmt.

    SAP GTS Customs & compliance mgmt.

  • 2011 SAP AG. All rights reserved. 11

    Common EWM drivers over ERP WM

    Warehouse Order Creation System creates optimized work

    packages (e.g., pick-path, pallet build, etc.)

    Sophisticated wave management

    Advanced Yard Management Functionality

    Deconsolidation/fanning

    Slotting

    Rearrangement (change bin assigned to product because of a

    change in activity or other characteristic)

    Advanced labor management functionality

    Internal routing warehouse moves can be granularly modeled by process or layout

  • 2011 SAP AG. All rights reserved. 12

    Common EWM drivers over ERP WM (2)

    Advanced replenishment techniques of forward picking areas

    Native integration with Environmental, Health & Safety (EH&S) for

    route determination, storage checks, dangerous goods paperwork

    Flexible mobile data entry framework

    (e.g., screen modification wizard, exception handling, etc.)

    Improved analytics with delivered BI and BOBJ Content

    (Crystal Reports, Xselsius Dashboard)

    Warehouse Monitor as central reporting and management tool

    Proven performance in high-volume environments

    More enhancement capabilities without modifications

    Goods Receipt Optimization

    (ability to check existing inbound deliveries or create new inbound

    deliveries from expected goods receipts)

    EGF (Easy Graphics Framework) for creating Dashboards

  • 2011 SAP AG. All rights reserved. 13

    Common EWM drivers over ERP WM (3)

    Advanced connection Material Handling Equipment without

    middleware (direct control at pLC level)

    Removes restrictions in serialization

    Removes restrictions regarding Handling Units

    Native RFID integration with Auto-ID Enterprise

    Automatic stock adjustment with plant-to-plant delivery discrepancy

    Initiation of all warehouse activities from EWM even as decentralized

    deployment (e.g., putting stock on hold, restricting batches, scrapping)

    More integration with more Business Suite components

    (e.g., Invoice before Goods Issue)

    Production staging in decentralized environment

  • 2011 SAP AG. All rights reserved. 14

    Differentiators and value of SAP EWM Comparison of SAP EWM with WM functions of SAP ERP

    SAPs strategic warehouse management solution

    Enhanced Visibility and flexibility

    Labor management

  • 2012 SAP AG. All rights reserved. 15

    Overview SAP EWM Customer & Market Status Strong customer growth and implementation momentum

    Facts and figures

    Over 120 new customers in 2011

    More than 150% new installations in 2011

    Over 150 ongoing implementation projects

    Productive use of SAP EWM in 20 countries and 24 industries

    Sample customers

    Live customers and live sites Customer geographical coverage

    Coca-Cola

    Enterprises

    0

    50

    100

    150

    200

    250

    300

    Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011

    Live sites

    Live customers

  • 2011 SAP AG. All rights reserved. 16

    Who adopts

    SAP Extended Warehouse Management and why?

    SAP WM and New Customers

    Existing ERP customers with legacy or Niche warehouse solutions

    Existing ERP WM customers

    New customers with legacy solutions, multiple solutions, multiple architectures

    Manufacturing & Distribution

    Consumer Products & Life Sciences

    Retail & Wholesale Distribution

    Discrete Manufacturing & High Tech

    Process Industries & Chemicals

    Logistics Service Providers

    WM

    S S

    itu

    ati

    on

    In

    du

    str

    ies

    Reduce costs through better warehouse efficiency, increased labor productivity and

    better space utilization

    Increase transparency in stock and processes

    Increase flexibility in warehouse process modeling

    Implement customer specific put-away and retrieval strategies

    Quickly onboard new customers

    Better manage value added distribution processes

    Strong integration with other SAP solutions

    Integrated Material Flow System (MFS) for automated storage and retrieval

    Why do Companies select SAP EWM?

  • 2012 SAP AG. All rights reserved. 17

    30% increase in warehouse productivity

    The best are leading the way with SAP EWM

    Near zero customer-complaint rate

    Increased speed and significantly reduced picking times

    20 warehouses live using the same template

    34% ongoing labor cost reduction

  • 2012 SAP AG. All rights reserved. 18 Public

    Services and ecosystem around SAP EWM Strong service offering and ecosystem

    Education

    Classroom training

    E-learning

    Certification program

    Ecosystem

    SAP Community

    Network

    User group for

    SAP EWM

    Social networks

    for SAP EWM

    SAP consulting practice

    24x7 global support

    Quality assurance services and

    SAP Safeguarding

    Rapid-deployment solutions

    Custom development

    Partners

    Global partners

    Expert logistics partners

    Local partners

    Complementary software products

    Service and

    support

  • 2012 SAP AG. All rights reserved. 19

    SAP EWM Migration Tools & RDS SAP ERP WM > SAP EWM

    Migration Tools Accelerated migration of data from WM in SAP ERP to SAP EWM

    Migration Tools

    Master data migration Products

    Bins

    Stock

    Physical Inventory

    Migration guide

    Rapid Deployment Solution

    System / data migration support

    SAP

    EWM

    SAP

    ERP

    Master data,

    inventory,

  • 20 ARC Advisory Group

    ARC Advisory Group research indicates SAP is #1 in WMS software market segment1

    Just released report by ARC titled Warehouse Management Systems: Worldwide Outlook 2011-2016 (August, 2012) evaluates market share of all vendors by geography, segment, category and customer tier.

    Results:

    SAP is #1 in the WMS software market segment1

    SAP EWMs market share has experienced tremendous growth

    SAP is #3 in market share in the overall2 WMS market3

    SAP is #1 in overall market share in Latin America and #2 in Asia, the regions forecast to be the fastest growing in 2011-2016

    1. Based on market share.

    2. Overall WMS market includes software, maintenance, implementation, and SaaS.

    3. If the report had included revenue from the SAP ERP WM product, SAPs market share would have been even higher.

  • 21 ARC Advisory Group

    ARC Advisory Group research indicates SAP is #1 in WMS software market segment1

    Some customers tell us that SAPs EWM solution is becoming functionally rich enough that it can be considered a best of breed solution.

    SAP EWM has gained strong traction in the marketplace due to its robust functionality, interoperability with the SAP suite of solutions, and the large

    existing SAP installed base of potential customers.

    This solution offers robust functionality that includes labor management and advanced slotting functionality without any extra fees

    Built-in support for most languages gives the product global appeal.

    The product has gained traction in the marketplace (the number of live sites doubled in 2010 and expanded at an even faster rate in 2011) due in part to

    offering a robust solution with differentiated functionality.

    SOURCE:

    ARC Advisory Group Warehouse Management Systems: Worldwide Outlook 2011-2016, 08/2012

  • 22 ARC Advisory Group

    Wrap up

    The WMS market

    Value of a WMS

    Different types of WMS

    Market evolution and SAP EWM

    ...

  • 2012 SAP AG. All rights reserved. 23

    Wrap-up

    Best-in-class, integrated warehouse

    management solution

    Comprehensive, deep warehouse

    management expertise

    Strong and growing customer base

    Strategic investment area for SAP

    Integral part of platform road map for

    supply chain execution

    SAP EWM

  • Thank you!

    Questions?

    Richard Kirker

    Solution Owner EWM

    [email protected]

    Andres Botero

    Global Lead, SCE Marketing

    [email protected]

    Steve Banker

    Service Director, SCM

    ARC Advisory Group

    [email protected]

  • 201 SAP AG. All rights reserved.

    201 SAP AG. All rights reserved.

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