Partner Sales Power-Up Series -

SAP S/4H Product Sourcing Suite

Direct Sourcing for Automotive & IM&C
June 8, 2022

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 Today's Speaker

Ramanathan G
Director, Solution Management (Source & Contract - Direct Materials)

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Agenda

◼ Introduction
◼ The Solution – SAP Product Sourcing Suite
◼ Positioning
◼ Ideal target customer attributes
◼ Product Lifecycle addressability
◼ How was the product developed
◼ Solution overview
◼ Customer success stories

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 Traditional Sourcing Solutions
are Not Keeping Up

Differentiation demands different approaches to sourcing

One-size sourcing doesn’t cut it anymore

Industry-specific sourcing is critical to long-term growth

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 Sourcing Solutions Must Support
Procurement’s Expanding Role
Accelerate Leverage Find innovative Drive sustainability
time to market supplier innovation ways to reduce cost in the supply chain

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 Different Industries Have Different Priorities

DISCRETE
MANUFACTURING:
DISCRETE HIGHLY ENGINEERED PROCESS
MANUFACTURING PRODUCTS MANUFACTURING RETAIL

Support comprehensive Embrace supplier Deliver a strong focus on Drive continuous innovation
collaboration with co-innovation and support product quality, consumer (e.g., private label) and faster
in-house or external long-term procurement plans. safety, and sustainability. delivery of new products.
manufacturing and BOM-
driven sourcing.

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SAP Product Sourcing
• Offers distinctive sourcing capabilities
• The solution is developed on S/4HANA needed to support business processes to
stack to address more-advanced sourcing track and manage sourcing of direct spend
requirements specifically for automotive across product lifecycle during product
industry and industrial manufacturing development → mass production → Contract
industries re-negotiation

Sourcing and
contract
• Planning and scheduling of sourcing management
projects, Mass renegotiation of Developed with a leading global automotive
contracts, Trading partner collaboration giant as a co-innovation partner and supported
on quotation, negotiation across supplier by automotive roundtable and discrete CEI
networks Available deployments –
• Flexible and configurable pricing
conditions with options to include Cloud Edition, Hybrid: On-Prem & Cloud
commodity index price Launch: Sapphire Orlando – May 2022

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Positioning with customers

Spend Type / Industry Automotive / IM&C Others

SAP Strategic Sourcing

Direct SAP Product Sourcing *
Suite

Indirect SAP Source-to-Contract

SAP Product Sourcing *

SAP Strategic Sourcing
Both +
Suite
SAP Source-to-Contract

* Prerequisites :
• SAP S/4HANA Enterprise Management
• SAP S/4HANA for central procurement (for a specific
scenario)

Datasheets : SAP Source-to-Contract | SAP Strategic Sourcing Suite

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Quick check – Which solution would you position ?

 Case 1 : Automotive customer / Revenue : $ 200 B / Worldwide Ops / Looking to develop

new EV framework & design / S4H customer (On-Premise) / direct only
A. SAP Source-to-Contract

B. SAP Strategic Sourcing Suite

C. SAP Product Sourcing

 Case 2 : Consumer Products customer / Revenue : $ 30 B / Looking to find new suppliers

for their “Grooming range of products” / S4H customer / all spend
A. SAP Source-to-Contract

B. SAP Strategic Sourcing Suite

C. SAP Product Sourcing
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What makes a good SAP Product Sourcing target customer:

Influencing Factor Details

Target Industry Automotive OEM, large automotive T1 and/or IM&C client
Customer Products Highly engineered products with thousands of parts and long planning cycles
Customer Mindset SAP first mindset and SAP strategy
Customer IT Landscape SAP system landscape with SAP S/4HANA deployed, in rollout or considered
Multi-SAP ERP landscape to play the strength of SAP S/4HANA for central
procurement
Integration Deep and sophisticated integration requirements into a multi-ERP landscape
Existing Supplier Portal Customer has existing supplier portal and needs sourcing solution being integrated
Strategic Relevance of S2C High, and need for customer specific processes and integration
Project Management Need for an overall pre-sourcing project management (procurement planning) across
multiple sourcing projects
Commodity Pricing Customer has a need to automate the source to pay process for raw materials with
commodity pricing

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 Discrete Manufacturing:
Highly Engineered Products

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 On Prem & Private Cloud Available / Public Cloud Planned

Launch
Plan

Product
Sourcing
Design

Demand
Procurement
project aggregation
from multiple
Product Sourcing Solutions from
management
ERPs
SAP
Suite of
Mass
renegotiation
product
sourcing
Sourcing and
auto-population
for Discrete Manufacturers
of contracts solutions of contract

Contract
from SAP terms

Contracts
with Highly Engineered
Renegotiation
Supplier
collaboration
Real-time
commodity
pricing*
Products

Manufacturing Procurement

* Initially only available for on prem edition (SAP

S/4HANA for product sourcing)

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Designed in Partnership with
Participants in SAP’s Automotive &
Industrial Machinery Round Table

The roundtable includes direct spend

experts from:

• Automotive OEMs

• Tier One suppliers

• Industrial machinery manufacturers

• Component suppliers

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Product Sourcing
Direct Materials Sourcing for Automotive & IM&C with SAP Procurement
Summary of Core Process Steps

Procurement Project Sourcing and Contract Management &

Management RfX Processing Distribution

 Template based setup of  Support for New Product ▪ Built-in transfer of award results
procurement projects with task, Development / Forward Sourcing into central contract and
milestones and responsibilities  Multi round sourcing projects distribution to operational
 Grouping of parts for procurement systems
 Scenario based awarding
procurement purpose ▪ Leverage of the negotiated
 Initiation of sourcing projects prices and conditions across
out of part bundles multiple ERP backend systems

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Commercialization Strategy for Product Sourcing

Deployment Quotation Mgmt & Procurement Planning

Product Sourcing
Option Contract Price Renegotiation (optional)

SAP S/4HANA Cloud for supplier

SAP Product Sourcing SAP S/4HANA for procurement
On-premise quotation and price renegotiation
(On-premise) planning​

SAP S/4HANA Cloud for product sourcing, private edition SAP S/4HANA for procurement
Private Cloud
(Product Sourcing, PCE + above SAP BTP based Apps) planning​

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Product sourcing solutions Extended solution landscape (S/4HANA 2021 FPS1)
Automotive and IM&C industries
SAP S/4HANA
S/4HANA Central Procurement
SAP S/4HANA for procurement
planning Material Central Purchase Central
Master Requisitions Order Contract
Parts Bundle parts
Milestones &
import & according to
Tasks
assignment to sourcing
Scheduling
Projects needs
SAP S/4HANA for product
Quotation
sourcing Mgmt.

Sourcing Quotation Award

Project Evaluation Decision Supplier
Quotation

ECA ECM CPE1

Legal Additional Legal Commodity

Contract Documents Transaction Pricing
Conditions
CPR
Legend
Core component Contract Price
Renegotiation
Optional add-on
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Solution Overview
SAP S/4HANA for Procurement Planning
Manage key procurement milestones to ensure timely product launch.

▫ CAPABILITIES
▪ Template based setup of procurement projects
with task, milestones, and responsibilities
▪ Grouping of parts for procurement purpose
▪ Initiation of sourcing projects out of
part bundles*

▫ BENEFITS
▪ Visibility across large and long running product
launches with multiple sourcing projects
▪ One source for all information related to
product launch timelines, milestones and steps
▪ Efficiency due to quick transitioning from plan
to action

Roadmap is subject to change without notice.

* Integration available from OP 2021 FPS 1,and Cloud is planned

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SAP S/4HANA for Product Sourcing
▫ CAPABILITIES
▪ Support for plan- and demand-driven
sourcing projects
▪ Multi-round sourcing projects
▪ Support for milestones, teams, approvals
workflow
▪ Scenario-based awarding
▪ Build-in transfer of award results into central
contract

▫ BENEFITS
▪ Process efficiency and speed
▪ Visibility across sourcing initiatives
▪ Cost reduction
▪ Process compliance
▪ Operational compliance by integration into
central contract

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SAP S/4HANA Enterprise Contract Management and Assembly
▫ CAPABILITIES
▪ Contract lifecycle management and central
repository for all contracts
▪ Template and clause library
▪ Automated assembly of documents for sourcing
projects and from supplier quotation
▪ Contract approval workflow and electronic
signature

▫ BENEFITS
▪ Contract visibility and transparency
▪ Accelerated creation of new contracts
▪ Reduction in source-to-contact cycle time
▪ Improved legal and process compliance

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SAP S/4HANA for Central Procurement
▫ CAPABILITIES
▪ One single procurement control center
▪ Automated demand processing for external
demands
▪ Central demand aggregation with built-in
initiation of sourcing projects
▪ Enterprise contract orchestration with support
for commodity pricing

▫ BENEFITS
▪ Higher automation and process efficiency
▪ Increased productivity
▪ Reduced operating costs
▪ Prevent disruptions during a system
transformation process

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 Available, planned for public cloud deployment
Contract Price Renegotiation
▫ CAPABILITIES
▪ Highly efficient process to regularly renegotiate
price updates with contracted supplier
▪ Initiation of price negotiations from
central contracts
▪ Embedded tracking against savings targets,
including simulation options
▪ Automatic update of central contracts with
negotiation results

▫ BENEFITS
▪ Process efficiency
▪ Direct spend reduction
▪ Better decisions during negotiations

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Use case: Leading Automotive
OEM

• Required sourcing support for new product

development and introduction

• Needed to plan procurement activities to support

launch of a new product line, track progress, and
provide ongoing visibility to stakeholders

• Needed better visibility and demand aggregation of

common parts across 12 brands and 8 regions

• Sought to collaborate with suppliers to jump start

new innovation needs

• Wanted to simplify operationalization of key terms,

including commodity index-based pricing, to contract
and execution systems

• Required integration to existing supplier portals for

RFx and proposals

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Use case: New Electric Vehicle
Manufacturer

• Seeking to ramp up its EV manufacturing from 45K

in 2022 to 180K in 2024

• Planning to launch 3 new car models in the next 3

years

• Sought an integrated source-to-contract solution to

support aggressive growth and launch plans with
end-to-end capabilities from procurement planning to
sourcing to contracting and execution

• Needed rapid deployment time to support its growth

objectives

• Required integration to procurement and

manufacturing systems of parent companies

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Partner Call to Action

▪ Continue your enablement journey: ▪ Identify customers who fit the target profile ▪ See the offerings in action: Don’t forget
▪ Review the product sourcing solutions and begin to evangelize the product sourcing to register for the demo session next
from SAP Enablement Package solutions from SAP week! Wednesday, June 15th at 10a
▪ Reach out to your SAP Partner Business EDT/4P CET
▪ For a deeper dive, access ‘S4511: suite
of product sourcing solutions from SAP Manager for additional support
with SAP S/4HANA on the SAP
Learning Hub
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28

Poll Question:
Which of the following statements best summarize your
understanding of the topic presented today?

I understand the SAP Product Sourcing offering

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and will be able to articulate it fairly well to my customer

I have understood the high-level value proposition

and would be able to position once I understand the details
I do not understand the offering completely yet.
Will need more enablement.

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29

Poll Question: What are your thoughts on the SAP

Product Sourcing Suite topic presented today?

Sounds very exciting. I would like to position

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this with my customers today
Sounds interesting. I would like to learn more
about the offering

I do not have an opinion at this point

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30

Poll Question: What additional content / collateral

would help you position this better with your
customers?

Additional deep-dive sessions to learn more about

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the products

Additional collateral which I could share with my customer

Access to a demo environment

Have other suggestions – will respond in the chat with them

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Q&A
Thank you!
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