RISE with SAP for Chemical Companies

Accelerating Digitalization

EXTERNAL

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reserved. ǀ L
Chemical manufacturers focus on 4 strategic priorities

Simplify to shrink
cycle times Compete as
an ecosystem

Adopt strategic agility

Sell business outcomes in response to market
instead of products dynamics

DECREASED 20%
Upload time of 1,000 accounting documents – from 4 days to 10 minutes¹ Boost in the number of automated financial postings using SAP Cash Application
software²

‹#›
Common Challenges faced by Chemical Industries
1.Consistent Quality Maintainance:

Managing and monitoring quality of raw material, intermediates and finished products is a complex task with varying grades and quality of
material supplied.

2.Optimizing Quantity in Production

Formula or recipe management, Capacity Optimization, Lot and / or Batch sizing and sequencing, Production Planning & Scheduling, Rework of
off-spec material, Accurate cost distribution and management are the challenges related to Production processes of a chemical manufacturing
unit.

3. Sourcing & Procurement

Your sourcing personnel need to identify and nurture suppliers who can supply materials as per specifications, at the required price, time and
location while meeting their obligations to environment and safety of their workforce. Your procurement team should be able to procure material as
per specifications and ensure that all material reaches your manufacturing locations or warehouses at the required time and at lowest price.

4. Controlling Shelf life

In order to maintain the quality of the chemicals, controlling the shelf life of materials is one of the biggest challenge faced by Chemical Industries.
As health of chemicals are very sensitive regrading the wellness of living being, maintaining shelf life of a chemical component before its
devastation neeeds proper management and smart control.
Global megatrends and disruptions are reshaping chemical manufacturing
Accelerating the need for sustainable business model innovation

Global megatrends Industry trends

Circular Digitalization Sustainable Postglobal

economy energy supply chains

Customer- Increasing Rapid product Global

driven R&D regulation commoditizatio competition
n

The COVID crisis

Delivering innovative, outcome-based solutions at scale

However, our customers are faced with multifaceted challenges that are
prohibiting their ability to realize the full potential value the Intelligent Enterprise
unlocks
Analytics out of
reach of business
users
Creating the business case for
Compliance with regulatory change with outcome driven process
requirements is time consuming and harmonization is often challenging
costly

Lack of strategic agility Difficult to support new customer

diminishes requirements and business models
competitiveness

Lack of realtime data leads

Time to market too slow to poor business decisions

Slow execution
due to manual Transformation path
processes is not clear
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reserved. ǀ
Expand business innovation in the chemicals industry

With SAP offering, you can always

extend business innovation with industry-specific solutions
Drive More Business Value
as new business opportunities and requirements appear. A Leverage industry best and next practices that
create new revenue streams and maximize existing
ones, improve assets efficiency, enhance
productivity, and allow for running sustainably

Business
process
Business
platform and Business Outcome-driven
services and tools
+
analytics networks
Transformation
Mitigate Risk, Reduce IT Cost, and Accelerate
B Time to Value with Cloud Delivery Capabilities
Gain capabilities that maximize transformation

+ Cloud solutions for

chemical manufacturers
from SAP and partners
readiness, simplify consumption through
“as-a-service experience,” help ensure operational
resilience, and reduce overall TCO – from SAP and
partners
Multiple Value Drivers improved In Chemicals Industry by SAP solutions
Impact Areas Revenue Growth Profitability Asset Efficiency Strategic-Other
Improved customer satisfaction,
Faster Time to Market, Increased Reduced Process Cycle times, Reduced High cash conversion cycle
Key Outcomes Realized Reduced TCO, Improved Agility,
portfolio of Products/Services, New Costs, Increased Sourcing Savings, efficiency, Optimized CAPEX,
Revenue Streams, Improved Improved uptime and asset Reduced Business & Technology Risk,
Improved Vendor Spend Compliance,
Manufacturing Throughput, utilization Improved Decision Making, Realized
Improved Yield per farm Unit
Increased Market Share Synergies

2%–10% Increase in revenue 0.5%–5% Optimization of R&D 10%–20% Improvement in 15%–40% Improvement in
Primary from new products & services spend product compliance customer satisfaction
2%–15% Reduction in 0.1%–0.5% Reduction in 3%–10% Reduction in energy 10%–20% Increase in employee
Value Drivers
manufacturing cycle time manufacturing cost cost engagement
2%–15% Reduction in days in 5%–30% Reduction in EH&S 5%–25% Improvement in overall
1%–30% Reduction in revenue
inventory penalties and fines equipment effectiveness
loss due to stock-outs
0.5%–3% Reduction in asset 5%–30% Reduction in lost time 5%–50% Reduction in order
1%–8% Reduction in time to
maintenance cost accident frequency fulfillment lead time
market for new products 3%–35% Increase in sales
1%–5% Reduction in total logistics Reduction in carbon footprint
1%–5% Reduction in un- costs forecast accuracy
planned downtime or outages 5%–10% Reduction in EH&S 5%–30% Improvement in on-time
Improvement in return on management cost delivery performance
assets 1%–25% Reduction in inventory
Reduction in revenue loss due carrying cost
to fulfillment issues 2%–10% Reduction in days sales
Reduction in revenue loss due outstanding
to quality and compliance 5%–15% Improvement of sourcing
issues savings on direct spend

Reduce Scrap Cost Improve days payable Reduce days to close annual
Other Key Increase revenue from cross-
Reduce asset maintenance cost outstanding books
sell/up-sell Improve overall equipment
Value Drivers Reduce customer churn Reduce sales cost effectiveness
Reduce EH&S penalties and Increase financial forecast
fines accuracy
SAP delivers differentiation with industry business capabilities

Customer Co-Innovation Planning and Sourcing Integrated Operations Delivery and Service
Mgmt.

Required business capabilities

Selling business Advanced inventory,
Integrated recipe development Supply collaboration Service order management
outcomes warehousing, and transportation

Constrained based production

Hand-over to production Extended production operations Advanced available to promise
Shrinking cycle time planning

Purchase contract management, Maintenance execution (with Advanced inventory,

Competing as an Product collaboration geospatial),
Purchase order collaboration warehousing, and transportation
ecosystem Mobile asset management
Project management and Environment, health and safety
Central requisitioning Product compliance
Adopting strategic agility portfolio management management

SAP S/4HANA

SAP Business Network

SAP enables differentiated business outcomes that maximize shareholder
value through SAP’s industry best and next practices

The top line The bottom line The green line Strategic and transformational
Increased upsell and cross-sell Reduced costs, optimized R&D Optimized environment impact, Improved customer satisfaction,
opportunities, increased portfolio of spend, high cash conversion cycle more resilient and circular value improved agility, reduced business and
products and services, new revenue efficiency chain, reduced waste, increased technology risk, improved decision-
streams, increase in service compliance making
revenue
2%–10% Increase in revenue from 0.5%–5% Optimization of R&D spend 10%–20% Improvement in 15%–40% Improvement in customer
new products & services 0.1%–0.5% Reduction in manufacturing product compliance satisfaction
2%–15% Reduction in manufacturing cost 3%–10% Reduction in energy 10%–20% Increase in employee
cycle time 2%–15% Reduction in days in inventory cost engagement
1%–30% Reduction in revenue loss 0.5%–3% Reduction in asset maintenance 5%–30% Reduction in EH&S 5%–25% Improvement in overall
due to stock-outs cost penalties and fines equipment effectiveness
1%–8% Reduction in time to market 1%–5% Reduction in total logistics costs 5%–30% Reduction in lost time 5%–50% Reduction in order fulfillment
for new products 5%–10% Reduction in EH&S management accident frequency lead time
1%–5% Reduction in un-planned cost Reduction in carbon footprint 3%–35% Increase in sales forecast
downtime or outages 1%–25% Reduction in inventory carrying accuracy
Improvement in return on assets cost 5%–30% Improvement in on-time delivery
Reduction in revenue loss due to 2%–10% Reduction in days sales performance
fulfillment issues outstanding
Reduction in revenue loss due to 5%–15% Improvement of sourcing savings
quality and compliance issues on direct spend
What industry leaders are doing today
Asian Paints

Challenges
Driven by an innovative spirit and by market trends, Asian Paints is transforming to become a provider
of decor products and services. To achieve this goal, the company needed to:
Standardize processes enterprise-wide
Quickly predict and respond to changing market conditions “The move to SAP S/4HANA
Maintain a single source of truth and SAP BW/4HANA is key
Streamline financial consolidation and reporting at the group level to our digital transformation
Realize analytical visibility across the group (both structured and unstructured data)
strategy. From planning to
migration to going live, SAP
Benefits Services and Support
Faster internal audit and closing processes helped ensure our success.”
Simpler, more-efficient maintenance of customer and vendor data Aashish Kshetry, Vice President – HR & IT, Asian
Paints Limited
Significant time savings by eliminating data reconciliation between finance and controlling
Real-time credit checks, improving credit data accuracy and efficiency and reducing risk
Greater manufacturing throughput with fewer resources
Control of complex warehousing and material flow and well as unified packing-line automation
Exception-based shop-floor operations with fast flagging of performance issues

Industry Employees Region

Chemicals >7,500 Asia Pacific, India
Industry context for scenario chemical manufacturers
Providing innovative customer outcomes instead of just products
BUSINESS AT A GLANCE

Demanding
customers
Shortening product lifecycles
Chemical Manufacturers of Consumers
manufacturing plants Consumer Products Stringent regulatory oversight
Provide Differentiated Products & Services
SOME KEY PRODUCTS & CUSTOMER MARKETS TYPES OF CUSTOMERS: Some Examples

Automotive
Polymers & Fertilizers, Chemical
Paints,
plastics herbicides, intermediates used to Personal care, pharma,
Coatings,
fungicides, make other raw healthcare, and nutrition
Adhesives Flavors,
insecticides materials
fragrances, Industrial gases Building materials
food Emulsifiers,
additives stabilizers, add other
additives Agriculture

Packaging
KEY PAIN POINTS

Long-term value and New Business Models

Rapid Product Commoditization| High Customer Expectations | Global Competition customer retention
| Sustainability requirements | Long time to market | Volatile supply chains
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Achieve predictable, lower TCO with pricing & infrastructure operations optimization

Flexible subscription pricing, better

Gain from Future-
aligned with future requirements based on
Fit, simpler metrics (e.g. Full Usage
Flexible Pricing Equivalent)

Reduced TCO
Reduce IT governance costs
Achieve Reduce infrastructure costs, while Reduce infrastructure costs
20%
Hyperscale leapfrogging complexity and learning Reduce IT operational costs
curve of using a public IaaS / PaaS Reduce shelf-ware
Economics
platform Improve IT user productivity

Reduced 3ʳᵈ party software & support fees

Automate Better service availability and cost
Technical Operations efficient operations leveraging SAP best
practice cloud operations Faster time-to-market for new capabilities & applications
Thank you

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reserved. ǀ