SAP Solution Roadmap for Mining & Metals Georg Gradl, IBU Mill Products & Mining, SAP AG September 2012

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Agenda

•

Industry Trends

•

SAP Solution Strategy

•

Upcoming Solution Launches

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Industry Trends

Mining and Metals - Industry Value Chains

Mining & Metals

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Key Trends in the Mining & Metals Industry Today Demand growth + Finite supply





Growing industrialization in emerging countries (esp. BRIC)

Price volatility

 Countries with natural resources will have a cost advantage

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Technology and Automation

 Product innovation in Metals will enable competitive advantage and drive margins



Daily commodity price changes of up to +/-5%



Ensure Health and Safety of people



Fueled by demand/supply imbalance and influence of financial markets



Zero incidents



Environmental regulations are influencing new asset location decisions



Responsibility of mining & metals companies towards affected community

Decreasing quality of available ore deposits

 Securing access to raw material supply will drive upstream integration

Sustainability & compliance



Business visibility and effective price & margin management are key to sustaining profitability across the value chain

 New process technologies will continue to drive manufacturing excellence 

Increasing establishment of remote control centers and shared services centers in Mining



Automation and Robotics 6

SAP Solution Strategy

More Innovation – Less Disruption – Longer Perspective

Evolution

More Innovation Breakthrough

Less Disruption

2015

December

2020

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Longer Perspective

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SAP Business Suite – Delivered on a quarterly Basis Key elements of Business Suite Evolution

Breakthrough

Continuously improved existing functionality

 Business Process Evolution

 User Experience

 Total Cost of Ownership

Radically improved or new functionality

Evolution

Breakthrough

 Business Process Innovation

 In-Memory: SAP HANA

 On-Device: Mobile

 Virtualization & Cloud

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SAP Business Suite – Delivered on a quarterly Basis Key elements of Business Suite Evolution

Breakthrough

Continuously improved existing functionality

Radically improved or new functionality

Business Process Evolution

Business Process Innovation

• Focus Topics (Customer Connection) • LoB and Industry road maps • Legal requirements

• LoB Innovations, e.g Commodity Management, Transportation • Industry innovations, e.g. DSR for Retail, Transactional Banking • OnDemand Integration • Subsidiary Integration

Evolution

User Experience • • • • • •

Flexible entry pages Contextual information (side panels) Integration of social media Lightweight apps (HTML5) Business Objects integration Right Hemisphere

Breakthrough

In-Memory: SAP HANA • • • •

Side-by-side content (e.g. BW) Accelerators (e.g. CO-PA ) New Analytics Native Applications on HANA DB (e.g.TPM)

Total Cost of Ownership • Simplification (ERP, Portal, BW on same NetWeaver (7.30) • Solution Delivery via RDS

On-Device: Mobile • Mobile applications • Partner / Customer development • Security and supportability, SAP store

Virtualization & Cloud • Platform-as-a-Service • System Landscape Virtualization

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Less Disruption SAP Innovation Delivery Models • Small improvements to existing applications (e.g. Customer Connection) • Delivery cycle: quarterly • Type: notes

FOCUS TOPICS SP SP

IN-ADVANCE SHIPMENT ENHANCEMENT PACKAGES

SP

SP SP

SP

• Selected large investments tightly coupled to core applications • Delivery cycle: quarterly • Type: add-on

SP

IAS

SAP ERP 6.0

SIDE-BY-SIDE RAPID DEPLOYMENT SOLUTIONS

Examples © 2012 SAP AG. All rights reserved.

V 1.0

SP

SP

SP

SP

SAP ERP EHP n

…

SP

V 1.5

SP

• Large investments deeply integrated into core apps • Consolidating focus topics • Delivery cycle: ~2 years • Large investments loosely coupled with Core Apps • Delivery cycle:~quarterly • Implementation packages w/o coding • Ease adoption at customer side • Delivery cycle: quarterly time 11

User Experience and Usability Give a fresh look and a greater experience to the Suite !

+ SAP GUI

+

Entry Pages

+ Enterprise Search

+

+ Streamwork integration

+ Corbu Design © 2012 SAP AG. All rights reserved.

NWBC with Side Panel

Right Hemisphere integration

+ Branding

Lanes 12

Longer Perspective Maintenance Extension for SAP Business Suite • To manifest the long-term perspective of the Business Suite and in support of the Innovation & Growth Roadmap the standard maintenance will be extended • SAP extends mainstream maintenance for the Business Suite core applications1 by 5 years through December 2020

SAP Business Suite 7

SAP SRM 7.0 SAP SCM 7.0

Core Applications

SAP CRM 7.0

SAP ERP 6.0

EHP6 EHP5

Longer Maintenance until 2020

EHP4 EHP3 EHP2

EHP1

SAP NetWeaver 7.x

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

1The

SAP Business Suite 7 includes the core applications (SAP ERP 6.0, SAP PLM 7.0, SAP CRM 7.0, SAP SCM 7.0, SAP SRM 7.0), supplementary applications and industry applications. © 2012 SAP AG. All rights reserved.

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Upcoming Solution Launches

Upcoming SAP Solution Launches for Mining & Metals Demand Growth & Finite Supply

Price Volatility

Sustainability & Compliance

Technology & Automation

SAP Solution Investments support Industry Trends

 SAP HANA  Mobile  Commodity Management

 Transportation  Procurement

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 Manufacturing Operations – Enterprise Asset Management – Sustainability – Operational Risk Management – Energy Management

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SAP Business Suite powered by SAP HANA

SAP UI

HTML5

Mobile

SAP BI 4

SAP HANA is used as database and foundation of SAP Business Suite and applications • Insight like never before – explore all data inside the business suite instantly and at any level and make operational reporting a business self service

SAP Business Suite Apps

VDL

PLM

SRM

SCM

CRM

ERP

BW

• Agility like never before – streamline processes by turning batch in online and changing the way processes run in todays suite

• Innovation like never before – leverage the HANA platform to Data Modeling

drive side-by-side innovations to the suite, sharing data and platform

Computing Engine

• The story will start with ERP on HANA for some selected pilot customers end of 2012

SAP HANA

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Our mobile portfolio – partner applications play key role

Future direction © 2012 SAP AG. All rights reserved.

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Prioritized mobile apps portfolio

Mobile field service and asset management

Healthcare mobile suite

Mobile consumer solutions Banking, telco, utilities, consumer products, retail CRM mobile suite Sales and retail execution

Procurement mobile suite

Mobile travel and expense management

Productivity mobile suite Configurable / Extensible Workflow HCM / FIN / SCM Content mobile suite “NOW,” “Box,” and “BoardDocs”

Mobile business intelligence and analytics Mobile sales execution and direct store delivery

In addition, a growing set of custom app scenarios for each of the 24 industries, built by the Mobile Innovation Design Center Future direction © 2012 SAP AG. All rights reserved.

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Commodity Prices are Volatile • Commodity Price Volatility is constantly increasing for Commodities like Oil, Copper, Lead, Zinc, Sugar and Wheat. • Volatility is significantly higher than for currencies or interest rates • Volatility has a high impact on the profit of many companies • Calculating and managing the material cost for end products becomes difficult • Liquidity and cash planning becomes challenging • Hedging with financial derivatives can be a strategy to manage the challenges

Source: Commerzbank /Wirtschaftswoche – Commodity radar screen for September 2011

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Procurement Transformation Procurement Solution Innovation by SAP´s 5 Market Categories

Applications

Analytics

Mobile

Database & Technology

Cloud

Powered by SAP HANA © 2012 SAP AG. All rights reserved.

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SAP Enterprise Asset Management Areas of investment

Mobility Visualization and usability

TCO

Today and the future Functionality

Analytics Real-world integration

Future Direction © 2012 SAP AG. All rights reserved.

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Asset Visibility and Performance Maintenance predictive analysis using in-memory analytics Solution enhancements

Key benefits

 Leverage in-memory analytics (the SAP HANA platform) to predict failure based on a certain confidence and risk level

 Increased availability of assets

 Group multiple asset health monitors

 Reduced cost

 Identify trends in heath indicators for assets

 Improved asset safety

 Improved compliance

 Predict optimum time at which inspection as well as maintenance should be planned, based on trends in historical failures, age, utilization, environment, and other parameters

Operational Inputs

Real time Information

Operational forecasts

Manually inspected information Physical system of asset Operational Outputs

Virtual forecasts

System Specification and Characteristics Preventive and Corrective maintenance

Virtual system of asset

Next inspection

Planned Innovations © 2012 SAP AG. All rights reserved.

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SAP Manufacturing Solution Stack

QIM

Partner (MES) and many more…

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Manufacturing - Planned Future Innovations Overall Equipment Effectiveness based on SAP HANA



Performance Management Enhancements in SAP MII

Manufacturing Execution: 

Productivity and Usability Enhancements in SAP MII

Orchestration: 

Shop Floor Dispatching and Monitoring Tool for SAP ERP

Real-time and predictive intelligence using SAP HANA



‘Global Orchestration anchored by local execution’

Manufacturing Performance Management

Manufacturing Performance Management:

Global Orchestration From Business Strategy to Production Production Planning and Scheduling

Manufacturing Network Collaboration Visual Manufacturing Engineering After Market Sales & Service

Local Execution State of the art Plant Execution Fully integrated Make & Move

Visual Manufacturing Real World Integration and Mobility

SAP Sustainability Solution Roadmap

Operational risk management

Embedded product compliance

Management of Change (MoC) EHS Safety Issue Mobile Application EHS OnDemand 2.0: Sustainable Product Business Network

Sustainability reporting and analytics

Energy and environmental resource management

Solution today

EHS Management 3.0

Sustainability mobile apps EHS Management: Product Compliance

Global Batch Traceability

EHS Regulatory Content Updates

Sustainability Performance Management 3.0

EHS Management: Environmental Compliance (Emissions Accounting & Regulatory Content Integration)

Planned innovations

Sustainability cloud applications and collaboration

Sustainability analytics Sustainability & regulatory content Sustainability on-premise solutions Process enhancements

Nextgeneration UI and UX*

SAP HANA based acceleration and apps

Future direction

*User experience © 2012 SAP AG. All rights reserved.

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Innovations for Transportation Management Core transportation processes for freight forwarders

2012

Transportation Mgmt.

Innovations for Freight Forwarders

• • • • •

Comprehensive forwarding order mgmt. Ocean & airfreight management Service products & items Freight forwarder-specific documents Transportation cost allocation & freight settlement

Transportation Planner

Customer Service Agent

Document Processing Agent

Office Management & Accounting

Capacity Procurement & Network Planning

Order Management

Freight Execution & Monitoring

Customer Billing & Freight Settlement

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SAP Best Practices for Mining Offers Documentation and Pre-Configuration for Typical Mining Processes Leverage Pre-Integrated, Cross-Functional Best Practices to Reduce TCO and Time-to-Value

Scenario Name Quotation for Procurement

Consumable Purchasing Procurement Contract

Capital Mining Processing Project Manageme ntBusiness Planning & Compliance

Transportation Sales & Marketing

Area

Materials Management / Procurement

Physical Inventory / Inventory Count and Adjustment General Ledger

Scenario Name

Area

Accounts Coal Receivable Mining Accounts Coal Payable Blending

Supply Chain Management

Finance and Controlling Production

PeriodCopper End Closing Mining Financial Accounting

Contract-to-Cash

Copper Cost of Sales Concentrate Accounting & Cathode Production

Planning AssetCost Accounting

Operations Management

Cost Actuals Asset Acquisition for Constructed Assets (Investment Orders) Rail Bulk Transportation

Operational Compliance

Contract to Invoice Coal, Bulk Transport FOB Segment Reporting Contract to Invoice Coal, Bulk Transportation DES incl. Freight External Procurement of Services Contract to Invoice Concentrate, Bulk Transportation, QM

Enterprise Asset Management Supply Management

Costing Asset Accounting Internal Distribution Finance and Controlling Commodity Sales, Materials Management Bulk Transportation, / Procurement QM

Contract to Invoice Cathode

Enterprise Management and Support

Corrective Maintenance Preventive Maintenance

Covered by SAP Best Practices Baseline Version

Covered by SAP Best Practices for Mining V1.606

SAP Best Practices for Mining V1.606 to be release in 2012Q3

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Rotable Management

Enterprise Asset Management

Linear Asset Management Operational Risk Management

Environment, Health & Safety Management

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Thank you Georg Gradl Director SAP for Mining & Metals IBU Mill Products & Mining

SAP AG T +49 6227 744905 M +49 170 8555531 E [email protected]

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