Consumer Products Reference Architecture

1. Consumer Products Reference Architecture Speaker’s Name, SAP Month 00, 2018

2. Overview Business Capability Model ApplicationMap ProcessesOverview Trade Management Order to Cash Marketing Management

3. Industry Reference Architecture: Consumer Products

4. Consumer Products – Value Map 2018Enabling the consumer-driven digital enterprise Sustainable Product Innovation Sourcing and Procurement Agile Manufacturing Real-Time Supply Chain Sales and Marketing Project and Portfolio Management Strategic Sourcing and Supplier Management Manufacturing Management Demand-Driven Business Planning Marketing Management Product Lifecycle Management Operational Procurement Asset Management Logistics and Order Fulfillment Sales Management Commodity Management Trade Management Service Management Commerce Management Talent Management Time and Attendance Management Human Capital Analytics Human Resources Core Human Resources and Payroll Accounting and Financial Close Finance Operations Treasury Management Enterprise, Risk, and Compliance Financial Planning and Analysis Cybersecurity and Data Protection Finance Analytics Technology and Platform Application Platform and Infrastructure Database and Data Management IT Management Security Software Internet of Things (IoT) Business and Technology Services

5. Business Capability Model Consumer Products Product Innovation Sourcing andProcurement Manufacturing Supply Chain Marketing Sales Service Commerce Project and Portfolio Management Strategic Sourcing andSupplier Management Marketing Resource Management SalesPlanning & Performance Management Contact Center Infrastructure Commerce Management Manufacturing Management Business Planning Response and Supply ProductSafety & Stewardship Product Content and Data Management Customer Service and Support Trade Management Operational Procurement Segmentation andCampaign Management ProductLifecycle Management Logistics Operational Excellence Service Management Sales Force Support Revenue Management Human Resource Corporate Finance Loyalty Management Service Supply Chain Order andContract Management Core HR & Payroll FinancePlanning & Analysis Multichannel Marketing Self-Services Talent Management Accounting and Financial Close Revenue Management Social Media Management Time andAttendance Management Treasury & FinancalRisk Management Telesales Partner Channel Sales Human Capital Analytics Governance, Risk & Compliance forFinance FinanceOperations

6. SAP Portfolio for Consumer Products Companies Innovative End-2-End Optimized Processes in the Cloud Product Innovation Sourcing / Procurement Manufacturing Supply Chain Planning Procurement Analytics & Monitoring Production Planning Idea Management Identity, Consent & Profile Sales & Operations Planning Quality Management Co-Manufacturing Order Collaboration Strategic Sourcing Handover to Manufacturing Project Management Marketing Analytics Marketing Planning & Performance Supply Chain Analytics Demand Planning Overall Equipment Effectiveness Confirmations Direct Procurement Contract Management Requirements Management & Collaboration Regulatory Compliance Segmentation & Campaign Execution Loyalty Management Supplier Collaboration Supply Planning Manufacturing Performance Management Invoice & Payables Management Recipe Development Customer Attribution (Demand Driven) MRP Inventory & Batch Management Sales Analytics & Profitability Sales Planning and Budgeting Delivery Notification & Proof of Delivery Delivery Creatíon Receivables Management Order Taking e.g. online, mobile, EDI Execution and Settlement Customer Planning Picking Freight Cost & Forwarder Management Sales Backorder Management Sales Order Creation, ATP & Confirmation Packing & Labeling Promotion Planning Marketing B2B / B2C Trade Management Sales B2B / B2C Supply Chain Execution

7. Consumer Products – ApplicationMap SAP BPC SAP BW SAP IBP Demand SAP CRM SAP ERP SAP Sales Cloud SAP DSiM Sales and Marketing SAP SAC SAP Business Objects Trade Management SAP S/4HANA on-premise SAP IBP S&OP SAP Commerce Cloud SAP TM SAP MDG SAP Sales Cloud SAP CRM SAP ERP SAP BW SAP IBP Demand Sales and Marketing SAP EWM Sales Management SAP S/4HANA Public Cloud SAP S/4HANA Cloud Single Tenant SAP APO SAP S/4HANA on-premise Sales and Marketing SAP Marketing Cloud SAP CRM Marketing Management

8. Trade Management

9. Consumer Products – Process Model ‚Trade Management‘ Trade Management Sales Planning & Budgeting Customer Planning & Optimization Promotion Planning & Optimization Execution & Settlement

10. Consumer Products – ApplicationMap Sales and Marketing Trade Management SalesPlanningandBudgeting Customer Planning Promotion Planning Executionand Settlement SAP CRM SAP CRM SAP CRM SAP CRM SAP BW SAP BW SAP BW SAP BW SAP DSiM SAP DSiM SAP DSiM SAP DSiM SAP ERP (optional) SAP ERP (optional) SAP ERP (optional) SAP S/4HANA (optional) SAP S/4HANA (optional) SAP S/4HANA (optional) SAP Sales Cloud (REX/optional)

11. Consumer Products – Solution Model: Trade Management BW on HANA Master Data CRM SCM Planning S4HANA Master Data Conditions DSiM PAK TPM IBP S&OP CBP Planning Layout IBP Demand ATPP Uplift Baseline Baseline DMF SAP Sales Cloud (REX) BPC

12. Trade Management Information Flow Sales History DMF DSiM External POSMarket Research Volume Decomposition Master Data, Hierarchies Forecast Promotion tactics Promotion CRM IBP BW Trade Management Baseline Planning Uplift Promotions Master Data, Hierarchies Conditions Master Data Activities Campaigns Orders… Master Data, Delivered orders, Open orders, Hierarchy S/4HANA Inbound data Outbound data

13. Trade Management – Key Account Manager Process flow Promotion Plan Agree ment Preparation Prepare Plan customer promotions Baseline Plan Conduct Execute Sales Planning and Budgeting Promotion Execution Promotion Planning Execution andSettlement Customer Planning • Monitor bottom-up planning process • Ensure Plan Results meets targets • Regular Forecasting • Initiate corrective Actions • Review and Adjust • Align with Marketing and Demand Planning • Set up national promotions • Create customer specific promotion calendar • Align Plan with the internal Organization • Simulate Volume and Profitability • Analyse impact of price and trade term changes • Review Brand and Category Strategy • Review Targets • Review historical customer assortment and sales • Review Marketing Events Calendar, promotion library, brand strategy • Optimize promotional spending • Align with the customer Plan • Execute Promotion Tactic in Customer Orders • Collect Promotion Performance • Pay customer based on performance Application SAP Trade Management (CRM) Review Promotion performance Run internal Alignment with the LOBs on the Customer Plan Define HQ Promotion Plan Simulate Customer Business Plan without Promotions Define planning structures Review the past performance Run Customer HQ negitiations and establish budgets Define Promotion Tactics and spending in customer specific promotions SAP S/4HANA Enterprise Management Retrieve customer specific price, generic sales information, relevant for the P&L Create pricing objects (conditions) Create sales order Read pricing information

14. Sales Management (Order to Cash)

15. Consumer Products – Process Models Sales Management ATP check Credit Analysis & Approval ConfigurationandPricing Order Taking Customer Acquisition Delivery Processing Order Smart Sizing Tracking & Status Check Order Fulfillment Goods Return processing Customer Invoicing Payment Receiptprocessing Backorder Management

16. Sales - EDI order Process flow Order Fulfillment Sales Goods Return Billing Sales Order creation Returns processing Billing process Delivery creation Goods Issue Delivery / Transport Proof of Delivery • Availability check, Promotion Determination, Pricing • Vendor sends order confirmation • Initiate Returns Process • Receive returns • Credit memo for customer • Release of requisition • Purchase order is created - Customer sends feedback about delivered quantity • Information that goods are received from customer • Creation of billing document to customer • Direct / at specific time Application SAP S/4HANA Enterprise Management Returns Refusal Create delivery document Post goods issue Determine active Promotion, Run pricing Deliver Receive Proof of Delivery Run ATP check Sales Order Order Smart Sizing Create Customer invoice Returns Delivery Accounting document Finance/Controlling Credit Memo

17. Contracts – Sales Rebates Process flow External Sources POS Data Administration & Settlement Condition Negotiation with Customer Creation of Condition Contract Agreement Billing Documents Deliveries Condition Contract Settlement Settlement Report Posting in Finance Automated (Delta) Accruals Postings • Conditions, Settlement dates, Business volume (Sales Orders, Billing documents, …), Partial & Final Settlement • Transparency of validation and processing of rebate agreements via an audit regarding rebate accruals and settlement activities • Sales Contract Type • Optional: create contracts for periods with start date in the past • Post accruals in regards with transactual documents • Alternatively, accruals can be posted subsequently in a delta accruals processing • Any accruals are reversed in a partial and final settlement • Transfer each settlement document to accounting • Collect settlement documents in a collective document first • Calculation of rebate claim • Data base: transactual documents (no aggregates) • Partial & Final Settlement Application SAP S/4HANA Management Reporting for Business Volume; Settlement Runs, Detailed Statement, … Open Condition Contract & select type “Sales” Condition Contract AccrualsReversal Maintain Contract Details FI Customer Contract Settlement Transactual Data Optionally schedule Delta Accruals Settlement Create Settlement Calendar with partial and final settlements Accruals Posting Release & Save Condition Contract

18. Contracts – Supplier Rebates Process flow External Sources Goods Receipts Supplier Invoices Purchase Orders Administration & Settlement Condition Negotiation with Supplier Agreement Creation of Condition Contract Condition Contract Settlement Posting in Finance Settlement Report Automated (Delta) Accruals Postings • Conditions, Settlement dates, Business volume (Purchase Orders, Invoices, …), Partial & Final Settlement • Transparency of validation and processing of rebate agreements via an audit regarding rebate accruals and settlement activities • Transfer each settlement document to accounting • Collect settlement documents in a collective document first • Purchasing Contract Type • Optional: create contracts for periods with start date in the past • Accruals are posted due to true material cost determination • Post accruals in regards with transactual documents • Alternatively, accruals can be posted subsequently in a delta accruals processing • Any accruals are reversed in a partial and final settlement • Manual or automated calculation of rebate claims • Data base: transactual documents (no aggregates) • Partial & Final Settlement Application SAP S/4HANA Management Reporting for Business Volume; Settlement Runs, Detailed Statement, … Open Condition Contract & select type “Purchasing” Condition Contract AccrualsReversal Maintain Contract Details FI Supplier Contract Settlement Transactual Data Optionally schedule Delta Accruals Settlement Create Settlement Calendar with partial and final settlements Accruals Posting Release & Save Condition Contract

19. Omni-Channel Sales Field Sales Representative Web Shop EDI Internal Sales Representative / Call Center Sales Order VMI

20. Sales – Web Ordering Process flow Web Ordering Check Out Web Basket Customer Question (optional) Customer LogIn Product Search Product Details & Price Ordering • Customer enters shop with user / / password • Customer interaction via chat • Browse product catalog and additional info (specification, etc) • Display of customer specific prices per material • Display of material prices, discounts, total net price, etc • Customer leaves Web Shop • Logistics execution via SAP S/4HANA • Customer places order and receives sales order confirmation Application SAP Commerce Cloud Display TotalPrice Display Customer Material Price Assisted Service Module (personalized) Web Shop Product Catalog(s) Order Confirmation SAP S/4HANA Enterprise Management Calculate Total Price Calculate Customer Specific Price Create Sales Order Logistics User Generation Call taking SAP Hybris Service Cloud

21. Sales – Ordering via Call Center Process flow Customer Interaction with service agent Customer inquiry Check availability & price Customer accepts quotation (optional): Customer Identification Create Sales Order ISR checks inventory (or supplier catalog) and customer specific price Internal Sales Representative (ISR) enters inquiry details (materials, quantities) Customer identification via telephony integration Customer phones, sends mail, fax.. ISR creates Sales Order with delivery date, address, … Application SAP Service Cloud Telephony Integration Create Inquiry Order Confirmation SAP S/4HANA Enterprise Management Interaction Center ATP & pricing Create Inquiry Create Sales Order Credit Limit Check

22. Sales – Field Sales Representative Process flow Follow up actions Product information Visit planning Check customer information Execute tasks Follow-up activities Visit Execution After Visit Work Visit Preparation • Update customer master data • Inform Sales Manager • Take notes • Conduct tasks being created by sales manager • Evaluate product damages, etc. • Customer request for quotation • Order taking • Pick up material as returns • Customer interaction at site • New product proposal; promotions • Open orders, leads, reports, opportunities, etc. • Calendar check • Route planning • Driving directions Application SAP Sales Cloud Open Product Catalogue Complete tasks Check calendar, plan route, check map.. Account 360fact sheet, account intelligence.. Create Sales Order Create Task,enter note,create documents SAP S/4HANA Enterprise Management Retrieve customer specific price, Credit Limit Read Sales prices & ATP Sales Order Read pricesstockfinancial information

23. Sales – Field Sales Representative Process flow Visit planning Check customer information Product informationconsulting Execute tasks Create quotation Follow up actions Create sales order After Visit Work Phone Contact Visit Execution Visit Preparation • - Phone calls- opportunities- service tickets- take notes - Open orders, KPI’s, leads, opportunities, reports.. - Customer asks for product - Calender check- Plan route- Driving directions - Customer requests quotation - Any task created by sales manager or sales rep • - check stock availability, customer credit, customer price Application SAP Sales Cloud Create Sales Order Open product catalogue Check calender, plan route, check map.. Account 360fact sheet, account intelligence.. Complete tasks Create Quote Create activity,enter note,create documents Retrieve customer specific price,ATPcredit limit SAP S/4HANA Enterprise Management Retrieve customer specific price, credit limit Read sales prices Read pricesstockfinancial information Create Sales Order

24. Sales – ordering via contact center Process flow Customer Interaction with service agent Customer accepts quotation Customer inquiry Check availability & price Create quotation (optional) Create Sales Order (optional): Customer Identification ISR checks inventory (or supplier catalog) and customer specific price Internal Sales Representative (ISR) enters inquiry details (materials, quantities) Customer identification via telephony integration Customer phones, sends mail, fax.. ISR sends quotation via mail, fax, … ISR creates Sales Order with delivery date, address, … Application SAP Service Cloud Telephony Integration Create Inquiry Create & send Quotation Order Confirmation SAP S/4HANA Enterprise Management Create Sales Order Interaction Center Create & send quotation ATP & pricing Create Inquiry Credit Limit Check

25. After-sales Contractsettlement After-sales Customer Service Returns Post-analysis

26. Customer Service Process flow Customer Customer Service Respond to customer Analytics Resolve ticket Ticket creation Ticket management Customer requests support • Customer calls, send email, uses chat, creates request in web shop, uses social media • - Customer receives solution through same/ preferred channel • - ticket closing Classification of ticket, routing to responsible agent - Search in knowledge base, get in contact with others, find information elsewhere - Automatic creation based on incoming service request –Manual creation) To fine-tune service strategy Application SAP Service Cloud Reporting Ticket creation Enter solution/ post to customer Automatic classification and routing/enter manually information Use knowledge base Collaboration with colleagues Predicted ticket category , suggested answers New ticket Use other systems Prediction Service SAP Ticket Intelligence (SCP)

27. Customer Returns Process flow Customer Returns Return to Supplier Material Inspection Customer Billing Refund Determination Follow Up Actions Material delivery Goods Receipt Customer initiates a return Free available / specified stock • Immediately • After Inspection • After compensation by Supplier • at any time • Material remains in first location • Back to Customer • … • Insp. at DC • Insp. at Supplier • Insp. at Customer • … • At the counter • By Field Sales Rep • With w/o notification • … Credit memo (partial / full refund) Return to Scrap Application SAP S/4HANA Enterprise Management Credit Memo Request (automatic generation) Credit Memo Goods Movement to Scrap / Free Available Stock / … Post Goods Receipt Create Returns Delivery (automatic generation) Material Inspection Create Returns Order Logistical Follow-Up Goods Issue (automatic generation) Outbound Delivery (automatic generation) Replacement / Send back to Customer Sales Order / Invoice Inspection Outcome

28. Procure to Pay

29. Typical process - from demand planning to vendor invoice Material requirements planning Contracts Pre-Analysis Invoice verification Goods Receipt Combining requisitions / source of supply determination Create Purchase Order Create purchase requisitions Procurement Follow-on process Demand Planning Contractsettlement Post-analysis

30. From demand planning to invoice Process flow Invoice Logistics Demand Planning Procurement Invoice verification Planning Create Purchase order Monitor procurement Create purchase requisition Warehouse activities Shipping notification Goods Receipt Overdue orders, spend trend, contracts … Release of requisition, purchase order is created and send to vendor - Planning run checks stock, consumption and open orders - Calculated quantities entered in Receiving products, posting good receipt Stock is stored in warehouse Vendor informs on upcoming delivery • Receiving and verification of vendor invoice Send to vendor Application SAP S/4HANA Enterprise Management Automatic vendor determination/ creation of purchase order Requirements planning Create Purchase requisition Control & release purchase requisition Post goods receipt/ update inbound delivery & Purchase order Post vendor invoice / invoice verification Create Inbound Delivery Procurement overview monitor Accounting document Accounting document SAP Extended Warehouse Management Create inbound delivery order Post goods receipt Putaway

31. Marketing Management

32. Consumer Products – Process Model ‚Marketing Management‘ Marketing Management Brand Management Marketing Strategy Management Marketing Insights & Performance Management Marketing Partner Management Marketing Planning & Budgeting

33. Marketing – Marketing Campaigns Process flow Execute Activity Feedback Analyze Select Target Group Revenue Recognition Evaluation Planning Evaluation (Field) Execution Plan & Create Campaign Execution Analyze • Monitor campaign result • Perform subsequent activities if needed • Order Creation as result of follow-up activity • Verbally, written form, … • Update Customer Data in system • Role: follField Sales • Conduct ow-up activities as agreed with Marketing / Sales Manager • Identify relevant customers & assigned Field Force • Creation upon characteristics & KPI´s • Decide on follow-up activity (phone, customer visit, tasks) • Inform & align with Field Sales • Regular Sales Analysis • Detect bad sales performance • Decide on strategy • Role: Marketing / Sales Manager Application SAP Marketing Cloud Update Customer Account Analyze campaign Analytics Dashboard Create segmentation model & release target group Create& Start Campaign SAP Sales Cloud Phone call, appointment, task Activity records automatically created Execute Activity DiBo??? SAP Analytics Cloud Analyze campaign, customers SAP S/4HANA Enterprise Management Accounting Sales Orders

34. Marketing – Product Recommendations (Web Shop)op Process flow Define recommendation scenario Analyze Activate scenario Evaluation Execution Planning Customer browses through catalog Show recommended products • Define recommendations • Automatic creation • -scenario ( viewed together, Top N..)- define place where shown - Analyzes based on click stream data - detail pages, check out, entry page… - release recommendation- add to web shop - recommendedproducts presented in web shop at defined place Application SAP Marketing Cloud Create scenario Activate scenario (ID) Send recommended products Send recommended products Analyze recommendation SAP Commerce Cloud Customer checks product details page Customer goes to check out Click through information Add scenario ID to content

35. New Product Introduction

36. Financials

37. Finance – Accounts Receivable Process flow Accounts Receivable Accounting Payment with Electronic Bank Statement Billing document Billing Reporting Manage Down Payments Collections + Dispute Management Customer Scoring Clearing Payment w/o Electronic Bank Statement • Control payments • Dunning processes • Customer disputes • Create + post down payments • With reference to Sales Order • W/o Sales Order • E.g. DSO analysis, credit status • Posting in accounting • Clearance of open items • Credit Management Application SAP S/4HANA Enterprise Management Days Sales Outstanding Credit limit utilization Approve Bank Payments Post Incoming Payment / Edit & Assignment of Open Items Create Invoice / Check Invoice List Post & Clear Customer Down Payment Control payments / potent. create dunning notes Overdue receivables Account balance Invoice and payment docs Match results SAP Cloud Platform Due date analysis SAP Cash Application Match invoices with payments

38. Finance – Accounts Payable Process flow Accounts Payable Optional: Payment Approval Schedule Payment Invoice Payment Preparation Invoice Reporting Release Payment • Select payment method (Bank, online, etc.) • Manual/automatically • Display of relevant status & generated postings • Invoice verification • Update inventory value • Update accounts payable • Monitor open payments • View supplier line items • Manage payment blocks Application SAP S/4HANA Enterprise Management Days Payable Outstanding Display Balances Enter Vendor Invoice Report for the Automatic Scheduling of the Payment Program  App: Manage Automatic Payments Overdue Payables App: Approve Bank Payments Cash Discount Forecast Open Payments Analysis

39. Planning

40. Planning with SAP S/4HANA incl. SAP BPC Add-On for financial planning Process flow Planning Distribute Values Calculate Values Option: Add New Fields Update Plan Data Copy Actual > Plan Create new Workbook Open Workbook or Fiori App • Calculate values according to master data and KPI´s • Copy previous year's actual data to the current year's plan data • Distribute year values across periods with self reference or with equal distribution • Plan on master data that do not yet exist • Analysis for MS Excel or Fiori Apps as front-end • Consistent view on plan data • Actual data / master data are accessed directly in real time w/o any replication • Plan on master data available real-time SAP S/4HANA Enterprise Management • SAP BW with SAP BPC Add-On: • Cost Center Planning • Internal Order Planning • Market Segment Planning • Profit Center Planning • Profit & Loss Planning • Sales Planning Application MS Excel Worksheets Transactual Data Fiori Apps Optional: Creation of new planning applications SAP HANA InfoProvider: Multi Provider (Plan / Actual) Plan Data Actual Data

41. Planning with SAP BPC, version for SAP BW/4HANA Process flow Planning Create applications for manual planning Save Changed Values Audit Data Execute planning function Define Planning Model Objects Create Data Basis • Save your data in planning application • Check data before saving on database • Track changes made to transaction data • Changes = delta values from the change history • Copy, delete, forecast, aggregate, … data • Use input-readyqueries for planning • Simple data entry or complex planning • Top-Down distribution • Select InfoProviders to store planning data for planning • Define InfoProvider & model relationships (e.g. product & product group) • Select standard planning functions Application MS Excel SAP Analytics Cloud Business Objects SAP BW/4HANA Client SAP S/4HANA Enterprise Management Non-SAP SAP BPC Add-On for BW/4HANA Standard Configuration with MS Excel Embedded Configuration with MS BO Transactual & Master Data External Data InfoProvider: SAP HANA SAP HANA InfoProvider: InfoProvider: Database Tables Database Tables

42. Thank You! Patrick FlohrChiefSolution Expert for Consumer Products Industries SAP Product Innovation SAP SE Dietmar-Hopp-Allee 16 69190 WalldorfGermany Phone +49 / 6227 / 7 – 43746 Mobile +49 / 160 - 8896183 E-Mail patrick.flohr@sap.com