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Collaborative Demand and Supply Planning for Chemicals

Kieran: Ray, can you first outline the customer need and pain point addressed in the
central scenario?

Ray: The chemical industry has been hit hard by fluctuating raw material and
energy prices. This has made it really difficult to get visibility into demand patterns.
Without this visibility, global supply chains are simply not responsive enough and
inventories are rising with customer service levels dropping. This is probably the key
painpoint – lack of demand visibility leading to rising inventories and poor customer

Kieran: What’s the SAP solution and where is the value add?

Ray: Well, there are many SAP solutions that help to address this issue, so you really
have to review your specific pain points first. Most chem companies start with a well defined demand planning process from our Supply Chain Management suite and then
move onto supply planning and capacity utilization. Leading companies are
implementing Enterprise Inventory Optimization by SmartOps – this is a multi-echelon
inventory package that dynamically changes inventory settings based on all the
uncertainty in the supply chain. We have been seeing a reduction of 20-30% of
inventory with improved customer service levels.

Kieran: What about competition? How is the SAP solution better?

Ray: Ironically, the biggest competitor is probably still spreadsheets and manual processes. With 90% of the chemical industry running SAP, many chem customers are leveraging their SAP footprint and trying to further automate their supply chain processes with an integrated platform. We have many customer references and success stories around the globe using our supply chain solutions.

Kieran: Can you give a rough estimate of implementation time and cost?

Ray: It really depends on the scope of the project – we have had some companies up and running in several months. The key point is that we are very competitive on price
regardless of the size of the company, and our solutions are routinely used by all sorts of companies.

Kieran: Ray, thanks for putting all this in context.

Ray: You’re very welcome Kieran.

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