SAP Delivers New Supply Chain Solution to Help Companies Capitalize on Market Change

SAP Delivers New Supply Chain Solution to Help Companies Capitalize on Market Change
New Release of mySAP™ Supply Chain Management Creates Adaptive Supply Chain Networks That Intelligently Synchronize Supply and Demand


HANOVER, Germany - March 09, 2006 - SAP AG (NYSE: SAP) today launched a new version of its supply chain management solution to help companies further evolve traditional, linear supply chains into flexible and dynamic networks of supply chain partners. The latest version of mySAP™ Supply Chain Management (mySAP SCM) offers new industry-specific functionality; strengthens demand-driven fulfillment networks; links service and product supply chains; and further enables companies to create an adaptive supply chain network. Companies using the new capabilities can increase their supply network productivity and profitability by identifying and capitalizing on sudden changes in supply and demand. The announcement was made at the CeBIT 2006 trade fair, being held in Hanover, Germany, March 9-15.

With more than 13,600 active mySAP SCM customers in all market segments and more than 1,800 running advanced planning, optimization and collaboration tools from SAP in conjunction with their supply chain execution systems, SAP has achieved its market-leading position by empowering companies to balance two opposing priorities: the need for efficient operations of stable business processes and the need to instantly adapt to rapidly changing business conditions. Capabilities from the latest release of mySAP SCM address both of these concerns.

Synchronizing the Service Supply Chain with the Product Supply Chain
Many companies have begun to recognize that the after-sales market now represents a significant revenue opportunity. A critical element to serving this market is to collaborate with business partners by synchronizing and integrating a company’s service supply chain with its product supply chain. mySAP SCM achieves this through service parts planning and execution capabilities that leverage SAP NetWeaver® to deliver a solution that is integrated by design—not stitched together after-the-fact, as is common in competitive solutions. The new capabilities enable end-to-end business process integration in complex and distributed environments, resulting in higher flexibility, visibility and adaptability to business changes. The benefits of this approach include higher forecast accuracy and performance for all parts, including those with irregular demand patterns. This in turn results in reduced inventory levels, improved working capital and customer service levels and lower operating costs.

Caterpillar Logistics Services Increases Supply Chain Adaptability
SAP customer Caterpillar Logistics Services, Inc. is currently in the process of implementing the latest release of mySAP SCM with the goals of increasing the adaptability of its service supply chain and enabling its network to intelligently replenish and produce based on actual demand.

“We chose to collaborate with SAP in the development of mySAP SCM in order to provide our customers with a comprehensive systems offering capable of delivering competitive solutions in the marketplace,” said Mary Bell, chairman and president, Caterpillar Logistics Services, Inc. “We are confident that mySAP SCM will support us in optimizing the logistics performance of many of our current and future clients. The mySAP SCM offering, combined with Cat Logistics’ processes and logistics professionals, will position us to continue providing global logistics excellence well into the future.”

“SAP is a leader in software ramp-up processes and deployment,” said Lora Cecere, research director, AMR Research. “Customers that take advantage of this early adoption program will get closer access to the SAP development team, creating a system that distinguishes them from competitors.”1

New Capabilities Aid Manufacturing, Distribution-Intensive and Service Industries
The latest version of mySAP SCM offers new industry-specific functionality, including new forecasting and replenishment for retail operations. This functionality enables retailers to strike a balance between increased customer service levels and overall lower merchandise inventory. Enhanced capabilities help retailers replenish products with long lead times, handle seasonal products and introduce new products with short product life cycles using historical information on similar products to forecast demand.

Companies in the apparel and footwear industry can take advantage of new supply chain planning and collaboration capabilities to help retailers plan seasonal products using seasonal views and to source and replenish these products over a global network of factories or vendors at the store, style, size or color level.

New capabilities designed for other important industries include:

Enhancements to help consumer products and chemicals industries companies transform their supply chains into demand-driven supply networks that recognize promotion and turn business.
New project-management capabilities in SAP Advanced Planning and Optimization (SAP APO) for industrial machinery and components and aerospace and defense industries that support multilevel planning and adaptiveness in bottleneck situations.
Adaptive manufacturing enhancements that improve productivity and usability in planning and scheduling transactions, maintenance of the planning environment and support for integrated business planning.
New supply network collaboration capabilities that support Kanban and distributed manufacturing to enable supplier-managed inventory.
Visibility that keep companies apprised of the health of their supply chain, send notifications when exceptions occur and track key performance indicators to help manage the supply network with maximized efficiency.

Services-Based Approach Provides Maximum Flexibility
By leveraging the SAP NetWeaver platform, mySAP SCM can integrate with a company’s existing technology infrastructure and provide visibility across the business network. In addition, the SAP NetWeaver platform allows companies to create composite applications on top of mySAP SCM and across other SAP and non-SAP solutions to evolve and maximize the performance of company-specific business processes.

“To respond swiftly to shifts in customer demand, market opportunity or external threat, supply chain networks must be flexible and dynamic,” said Harald Stuckert, senior vice president and general manager, Extended Supply Chain Solutions, SAP AG. “The latest release of mySAP SCM makes the vision of adaptive supply chain networks a reality. Intelligently, these networks can sense and respond to changes in market conditions and to internal supply of products and services to help companies operate more efficiently and, ultimately, more profitably.”