Supply Chain Orchestration

Frequently Asked Questions

(Updated Sept 26 2014)

Table of Contents
INTRODUCTION..................................................................................................................................................... 3
GENERAL QUESTIONS........................................................................................................................................ 4
1. What are Industry Analysts saying about the SAP Strategy?.................................................................4
SUPPLY CHAIN ORCHESTRATION AND SAP SUPPLY NETWORK COLLABORATION (SNC) QUESTIONS..5
1. Why did SAP choose to introduce a Network Strategy for Supply Chain?...........................................5
2. What is the strategy for Supply Chain when it comes to Networks?.....................................................5
3. What is Supply Chain Orchestration?....................................................................................................... 5
4. How do the Ariba Business Network and SAP SNC work together?......................................................5
6. For manufacturers using Supply Chain Orchestration, when should they have suppliers using
Ariba Network/ SNC functionality?..................................................................................................................... 5
5. When will Supply Chain Orchestration be available?..............................................................................6
7. What are the features delivered from Integration perspective?.............................................................6
8. Do I have to purchase both SAP SNC and Ariba Network together?.....................................................6
9. What does this mean for existing customers of SAP Supply Network Collaboration (SNC)?.............6
10. What is the roadmap for SNC?.................................................................................................................. 6
11. What are the deployment options?........................................................................................................... 7
12. What are the release requirements?......................................................................................................... 7
SUPPLY CHAIN ORCHESTRATION FAQ

INTERNAL ONLY SECTION:................................................................................................................................. 7

INTRODUCTION
At the March 2014 SAP Insider Logistics and SCM Conference in Las Vegas SAP introduced its supply chain
strategy for enabling companies to transform their supply chains to demand networks.
This strategy is driven by the major business realities faced by todays companies:

Volatility in the market, both geographical and demographically due to the rising middle class in
emerging markets, the aging populations in the traditional markets, and the "always on" millennial
generation who are informed, connected and empowered.
Innovative (and disruptive) technologies such as 3D printing, many-to-many connectivity and the
internet of things (See a blog the Jetsons Supply Chain which discusses this in more detail).
Logistics Complexity driven by the volatility and innovation that has, in turn, made the logistics
networks must more complex and volatile.

SAP supply chain strategy is centered on four main areas that will transform supply chains to demand networks
in the future:

Supply Chain Monitoring to enable end-to-end visibility and segmentation of customers, products, and
suppliers. You can then not only monitors current activity, but also perform what-if simulations and
predictive analytics needed by todays supply chain professional. Sustainability is another key aspect of
monitoring, as its used to ensure compliance with regulations like batch traceability, serialization, and food
safety.
Integrated Business Planning to gain full demand transparency for short-, mid- and long-term on all
levels of the Bill-of-Material by leveraging demand sensing and statistical forecasting methods. This then

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drives a cross departmental Sales & Operations Plan balancing the impact on inventory, service levels and
profitability. In this process it is important to determining optimal inventory levels at each tier within the
supply chain and automatically set targets for operational plans. The decisions made in the S&OP process
then drive down into the operational demand and supply planning processes.
Demand-Driven Supply Network that leverage market and customer intelligence to benefit from market
volatility and avoid waste in the demand network. Establish response orchestration processes to support
omni-channel strategies and coordinate the demand fulfillment. And the need to connect the business
partners to the Business Network for supply chain collaboration processes to provide the flexibility, visibility
and transparency needed to orchestrate the fulfillment.
Logistics and Order Fulfillment processes to make informed decisions to balance customer service
and the cost of delivering that level of customer service. This requires aligned integrated distribution and
fulfillment processes around speed, efficiency and sustainability, and the ability to connect all the
participants of the Logistics Network and track the progress of the delivery.

From a planning perspective, this will be achieved by following the following solution strategy:

Build new supply chain planning solution provided in the cloud. This new platform will be called SAP
Integrated Business Planning and will have different modules for sales and operations planning,
demand, inventory, supply, and response.

Use harmonized data model by leveraging the SAP ERP data model for supply chain planning to
minimize the need for translating and duplicating data to a new model and by removing reliance on
batch update processes enable a real time supply chain platform

Merge SAP APO GATP and SAP APO PP/DS with SAP ERP to enable constraint based Materials
Requirements Planning (MRP)

Connect with the Business Network by building a supply chain orchestration solution with the Ariba
Business Network

GENERAL QUESTIONS
We realize that this announcement will raise a lot of questions from existing and future customers. As a result,
we have compiled an ongoing list of these questions to enable a smooth transition.

1. What are Industry Analysts saying about the SAP Strategy?

On April 7th, Gartner analyst Tim Payne published a First Take report (SAP's New SCM Strategy Puts
Hana in the Spotlight). Here are some of the highlights:
o With this solution strategy, SAP has taken a positive step toward realizing the goal of a more integrated,
technologically powerful and user-centric solution set for global supply chains
o As the market leader in supply chain software based on annual revenue, SAP has built a solid business
selling supply chain applications into its ERP installed base
o This new strategy is the beginning of SAP commercializing Hana for SC beyond the disparate Hana
applications released over the last couple of years. This new strategy, centered on supporting more global,
complex and volatile supply chains, merges cloud, in-memory computing, mobile, scale, speed, multi-
enterprise networks, and new integrated planning and execution paradigms.

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o If fully realized, this strategy will deliver a granular, real-time, horizontally and vertically integrated capability that
converges planning and execution. Additionally, the strategy would enable full visibility across many disparate
supply chains. Presently, most systems cannot offer this kind of holistic view.

On April 11th, ARC Analyst Steve Banker published SAP Announces a Bold Supply Chain Product Strategy
at SAPinsider. Highlights include:

o This visionary new product stack will lead to much better support for integrated business planning
(IBP). IBP is the central supply chain process.
o The SAP solution set allows for alternative scenarios to be examined in their Integrated Business
Planning application. After the right response is determined, a history of the logic that went into why
that is the best of different alternative responses can be stored .
o What is interesting is that SAPs conception of what a proper supply chain control tower should look
like now includes the idea of a playbook, even though they dont use that term. Partly for that
reason, SAPs control tower is the markets broadest and deepest conceptualization of this term.
o SAP has a great vision. Now they must execute on that vision.

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SUPPLY CHAIN ORCHESTRATION FAQ

SUPPLY CHAIN ORCHESTRATION AND SAP SUPPLY NETWORK COLLABORATION (SNC) QUESTIONS

1. Why did SAP choose to introduce a Network Strategy for Supply Chain?
Over the past few years, business has evolved and companies are adapting to changes in
manufacturing, distribution, replenishment - collaboration in general. Companies are evolving
from what was a linear Supply Chain model with fixed roles/responsibilities towards a Supply
Network where the focus is on the delivery driven by customer demand.

2. What is the strategy for Supply Chain when it comes to Networks?

The Ariba Business Network will be an integral part of the overall SAP SCM strategy where it is
envisioned as the main network and connectivity layer for all supply chain processes involving
external partners such as customers, suppliers, 3PLs, contract manufacturers and logistics partners.
This will be realized via a development roadmap that starts in 2014 with Supply Chain
Orchestration.

2 What is Supply Chain Orchestration?

Supply Chain Orchestration is an overarching solution that includes and integrates SAP SNC
and Ariba Collaborative Supply Chain capabilities, provided by Ariba Network.
Using the solution, companies can quickly onboard their direct materials suppliers and enable
them for efficient, targeted and transparent collaboration processes.
It combines the power of the Ariba Business Network and SAP SNC to address 100% of
customers direct spend and provide complete supply side visibility.
It provides a single interface for managing the advanced supply chain needs of critical, high-
value partners as well as the automation required for all supplier categories.

3 How do the Ariba Business Network and SAP SNC work together?
SAP SNC and the Ariba Business Network are complementary solutions allowing for efficient,
targeted and segmented collaboration with 100% of a customers direct materials suppliers.
Efficient partner on-boarding and single point of entry for ALL supply Chain Collaboration needs.

5. For manufacturers using Supply Chain Orchestration, when should they have suppliers using
Ariba Network/ SNC functionality?
Key here is to understand supplier segmentation not all supplier relationships are equal. Most
manufacturers segment suppliers commonly into - Critical, High Value and High Volume categories.
Suppliers, or supplier relationships, which are of Critical nature i.e. requiring very tight business
process control, a high degree of customized process steps, rules and alerts and driving High Value
because of that, should consider SAP SNC.
Examples of such relationships might be contract manufacturing relationships, very
expensive components or raw materials, supply constrained components/raw materials
or long/complex lead time components/raw materials.
Suitable typically for PCN/LE - SAP & Non-SAP Customer.

Supplier relationships for which standardized/ out-of-the-box business processes are sufficient and
have less customization would benefit from the capabilities delivered via the Ariba Network.
Particularly, when there is a need to manage High Volumes of such suppliers, as the Ariba
Business Network offers a scalable, fast and efficient managed-service for the end-to-end process of
on-boarding suppliers along with low TCO
Examples of such relationships are suppliers of commodities and standard
components, parts and raw materials
Suitable typically for LE/SMB SAP & Non-SAP Customers

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6. When will Supply Chain Orchestration be available?

Supply Chain Orchestration is available since August, 2014.

7. What are the features delivered from Integration perspective?

B2B Message capability to support Purchase Orders, Purchase Order Confirmations and
Advanced Shipping Notifications.
User interface Single Sign on capability to access advanced processes in SNC
Partner on-Boarding and Supplier Enablement for all categories of Suppliers using the
integrated solution.

8. Do I have to purchase both SAP SNC and Ariba Network together?

It is recommended, but not mandatory, Together the integrated solution offering delivers 100%
Supply Chain visibility for ALL Supplier Segments, ALL Collaborative Processes, ALL
Communication Channels (Portal, EDI etc). Both components of the solution could be
purchased and used independently. They are targeted towards different supplier segments
individually.
SAP SNC customers can benefit by adopting Ariba network to enable easy partner on-boarding,
system to system message connectivity, on top of what they currently do today
Ariba Customers can benefit by integrating to SAP SNC to support advanced collaboration
processes on top of that they do today
New customers can easily adopt in the cloud, for fast deployment and on-boarding to support all
the collaborative processes with suppliers & contract manufacturers

9. What does this mean for existing customers of SAP Supply Network Collaboration (SNC)?
SAP SNC Customers can now take advantage of B2B capabilities and built-in native integration with
Ariba Network to exchange Purchase Orders, Confirmations and Advanced Shipping Notifications
with Suppliers.
SAP SNC customers can now take advantage of Ariba Supplier Enablement features or
subscribe to packaged Supplier Enablement Services to on-board large volume of suppliers
efficiently.
For Suppliers of SAP SNC customers, who are assigned to do Advanced Collaboration processes
like Work Order Collaboration, Forecasting and Replenishment Orders, Supplier Managed Inventory,
Quality Notifications can now use newly built Single Sign On capabilities of Ariba Network to punch
out from Ariba Supplier Portal to customers SNC Application(s). This also allows Suppliers to use
Ariba Network as single Supplier platform and do business with multiple buyers instead of being
forced to logon to multiple buyer portals.

10. What is the roadmap for SNC?

SAP SNC is now also offered as a cloud solution with subscription-based pricing as of April 2014
via SAPs HANA Enterprise Cloud (HEC) organization in a secure, private, managed cloud
environment, alongside its traditional On-Premise licensing and deployment model.
Investments have been made into SNC to optimize the processes to be run on HANA, making it
faster.
Customer connection project for SNC has been initiated. This is a channel through which
customers can provide requirements for SAP development to look into, prioritize and deliver
functionality via notes/support packs.
SAP SNC is an important part of SAPs supply chain strategy and solution suite for the
foreseeable future, providing both great depth and breadth in functionality for supply chain
collaboration business processes including customer side collaborations used in CPG/Retail
Industry, as well as being highly customizable and with tight integration to SAP ECC and SAP APO
amongst other solutions.

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SUPPLY CHAIN ORCHESTRATION FAQ

SAP SNC, as part of the Business Suite, has a planned standard maintenance date of 2020.
Beyond 2020 every customer can get extended maintenance. The standard maintenance date for
the Business Suite is currently under discussion to be extended.

11. What are the deployment options?

SAP SNC, can be deployed in its traditional On-Premise licensing and deployment model
SAP SNC can now also be deployed as a cloud solution with subscription-based pricing as of April
2014 via SAPs HANA Enterprise Cloud (HEC) organization in a secure, private, managed cloud
environment.
Ariba Network is a public, cloud offering.
Ariba Network can connect to SAP SNC Hosted in the Hana Enterprise Cloud as well as customers
On-Premise (Release 7.0 EHP2 and above).

12. What are the release requirements?

SAP Supply Network Collaboration 7.0 EHP2 (could be deployed On-Premise or on the HANA
Enterprise Cloud)
Ariba Collaborative Supply Chain part of 13S3 Ariba Network available since Aug 2014.

INTERNAL ONLY SECTION:

What sales bag does SCO belong to?

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SUPPLY CHAIN ORCHESTRATION FAQ

SCO has two components that can be sold individually.

SNC belongs to the LoB Supply Chain sales bag
Ariba Collaborative Supply Chain belongs to Network/procurement sales bag

What are the target industries?

Typically focused on, but not limited to manufacturing - High Tech, Consumer Products, IM&C, Chemicals,
Automotive.

What messages are currently supported by Ariba Network?

Purchase Orders, Purchase Order Confirmations and Advanced Shipping Notifications are supported
between Ariba Network and SNC / ECC
Scheduling Agreement Release is supported between Ariba Network and ECC

Which solution should I propose to the customer?

Start with supplier segmentation to understand which category is the key challenge/pain point for the
customer
Refer to question 5 for solution proposal to address that supplier segment/s accordingly
Provide a recommendation to start the journey addressing that particular supplier segment, while
providing a holistic view of the encompassing solution to address ALL supplier segments

What about customer Collaboration?

SNC fully supports customer collaboration, but the Ariba integration is currently only focused on Supplier /
contract manufacturing processes.

What does the customer need to license? What are the relevant SKUs?

Pricing SKU SKU Metric Price Point

SAP SNC 7017350( COGS Based on COGS* (OD/OP)

Supplier OP)
Collaborati 8002626(
on OD)
SAP SNC 7017351( COGS Based on COGS* (OD/OP)
Outsourced OP)
Manufacturi 8002627(
ng OD)
Ariba NW tbd Network Ariba Supplier Membership Program
Sell Side Transaction
(Supplier Service Fee
Mgmt Fees +
SCM) Subscription
Fee
Ariba NW 8000647 Annual Buyer Membership Annual
Buy Side 8002537 Membership Ariba Network Document Automation (PO/Invoice
(Collaborati 50925985 + Per Doc + Automation) for Doc Usage Fees - Annual
ve Supply 8002459 Setup Adapter Setup Fees
Ariba Network Connection with SAP SNC setup
Chain) Services One Time SE
Supplier Enablement - Annual

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Can existing licenses be used?

Supply Chain Orchestration does not change any existing pricing for Ariba Network or for SAP SNC.
Customers wishing to leverage the integrated capabilities can use existing licenses or purchase additional
licenses using standard SNC and Ariba Network pricing. Supply Chain Orchestration does include a new service
to on board suppliers, which is priced separately as above, Contact the account team for more details.

In some cases, existing on premise SNC licenses can be used for SNC in the HEC environment, for cloud
adoption. This depends on the contract the customer has with SAP. Please check with Account team.