Delivering Real-Time Business Value for Aerospace and Defense

July 2013
Delivering Real-Time Business Value
for Aerospace and Defense
SAP Business Suite Powered by SAP HANA
Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2Public
The real-time opportunity
Globalization, worldwide market volatility, and
shrinking defense budgets are forcing aerospace
and defense (A&D) companies to adapt quickly and
streamline operations while continuing to innovate.
 Increase market capture and create next-generation solutions
 Execute complex programs on time and within budget
 Develop a responsive supply network, reducing cost and risk

Becoming an innovation-driven enterprise
Align business operations with customer needs
Manage
complex
customer
programs
 Monitor and analyze high volumes of financial and
operational data for faster and accurate project progress
and status
 Increase process efficiency in project management and
operations
 Reduce cost of finance and compliance reporting for big
programs
Design, build,
and service
complex
products
 Support lean initiatives and increase manufacturing
efficiency
 Increase aftermarket profitability with real-time monitoring
of service operations and full customer insight
 Plan, simulate, and run bigger projects in engineering and
manufacturing
Orchestrate
responsive
supply
networks
 Sync demand and supply in real time, adapt faster to
disruptions, model alternative scenarios
 Gain deep supplier integration for real-time collaboration
 Get instant insight into supply chain risk and performance

SAP Business Suite powered by SAP HANA
The next-generation business platform
Real-time business
In-memory
Business
transactions
Digital
connections
Collaborative
business
CloudSocial
Big DataMobile
One platform bringing it all together
Advanced
analytics

Industry value map for aerospace and defense
Enabling the innovation-driven enterprise
Technology
Solutions
Aftermarket Services
MRO Services and Lifecycle
Support
Service Parts Management
Equipment Visibility
and Performance
3D Business
Visualization
Consumer ExperienceAnalytics Enterprise Mobility
SAP HANA Platform
Managing Complex
Customer Programs
Collaborative Sales
Force Automation
Government Contracting
Program Management
Designing and Building
Complex Products
Product Development
and Compliance
Embedded Systems
Technology
Project Manufacturing for
Complex Assembly
Plant Operations and Maintenance
Responsive Supply Network
Collaborative Supply Planning
Supply Chain Execution
Supply Chain Analytics
People and
Talent
Core Human
Resources and Payroll
Talent Management
Workforce Planning
and Analytics
Finance
Financial Performance
Management
Accounting and
Financial Close
Collaborative Finance
Operations
Enterprise Risk and
Compliance
Management
Procurement
Supplier Discovery and
Lifecycle Management
Strategic Sourcing
and Contracting
Collaborative Invoice
to Pay
Commodity
Management
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Service
Management
IT Strategy and
Governance
Application Develop-
ment and Integration
Data
Management
Time and Attendance
Management
Treasury and Financial
Risk Management
Procurement and
Order Collaboration
IT Portfolio and Project
Management

Industry value map for aerospace and defense
Real-time value for key end-to-end processes
Technology
Solutions
Aftermarket Services
MRO Services and Lifecycle
Support
Service Parts Management
Equipment Visibility
and Performance
3D Business
Visualization
Consumer ExperienceAnalytics Enterprise Mobility
SAP HANA Platform
Managing Complex
Customer Programs
Collaborative Sales
Force Automation
Government Contracting
Program Management
Designing and Building
Complex Products
Product Development
and Compliance
Embedded Systems
Technology
Project Manufacturing for
Complex Assembly
Plant Operations and Maintenance
Responsive Supply Network
Collaborative Supply Planning
Supply Chain Execution
Supply Chain Analytics
People and
Talent
Core Human
Resources and Payroll
Talent Management
Workforce Planning
and Analytics
Finance
Financial Performance
Management
Accounting and
Financial Close
Collaborative Finance
Operations
Enterprise Risk and
Compliance
Management
Procurement
Supplier Discovery and
Lifecycle Management
Strategic Sourcing
and Contracting
Collaborative Invoice
to Pay
Commodity
Management
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Service
Management
IT Strategy and
Governance
Application Develop-
ment and Integration
Data
Management
Time and Attendance
Management
Treasury and Financial
Risk Management
Procurement and
Order Collaboration
IT Portfolio and Project
Management
Highest real-time
business value
for A&D
1 2 4
3
5 6

Today
KPI improvements are high-level estimates and will have to be validated for each customer situation.
With SAP Business Suite
on SAP HANA
Program management
Business value for portfolio management (SAP Portfolio and Project Management)
 Fact-based decisions require real-
time information on the status of
running projects, programs, and
proposals
 Analysis of large portfolios in the
portfolio dashboards is time-
consuming, leading to lack of
transparency
 Faster access to decision-making
information in dashboards, such as
status, timeline, financials
 Accelerated dashboard performance
for comparison of large running
projects and proposals
Increase
transparency for
decision making on
portfolio or
program level
Improve
speed of
aggregating
financial, scope,
or resource
information
 Aggregation of financials, such as
actual or planned cost commitments
along the investment hierarchy, takes
a long time for large portfolios
 Outdated information on investments
increases efforts for reviews
 Accelerated roll-up for financial and
capacity planning Information
 Calculation of most important key
performance indicators (KPIs) based
on values from financial planning,
removing manual calculation
 Enhanced transparency for holistic
monitoring of capacity demand and
supply at various levels of portfolio
hierarchy

Today
on SAP HANA
Project manufacturing for complex assembly
Business value for project management (project system)
 Long wait and locking times along
business processes hinder project
execution and impact flexibility to
react to deviations
 Execution of complex engineer-to-
order/make-to-order (ETO/MTO)
processes is suboptimal, due to
unmanageable data volumes across
finance and logistics
 Improved runtime of core project
management transactions, such as
resource-related billing, overhead
application, or progress analysis
 Higher end-to-end process efficiency
and increased employee productivity,
improving work quality
Increase
user productivity
and end-to-end
process efficiency
when managing
large projects
Improve
transparency and
decision support to
quickly adapt to
critical alerts
 Real-time analysis of high volumes of
data for complex, long-lasting
projects or cross-project monitoring is
challenging due to high data volumes
 Due to missing 360-degree real-time
transparency across applications,
deviations in costs, time, resources,
or quality are seen too late in the
process
 Acceleration of project info system
and new project line-item reporting,
delivering faster insights
 Early insight into project risks,
allowing timely corrective measures,
highlighting deviations in real time
 Planned: Project execution cockpit
to enable project managers and staff
to analyze status and progress of
one or more projects end-to-end with
real-time data

Today
on SAP HANA
Project manufacturing for complex assembly
Business value for material requirements planning (MRP)
 Decisions are often made based on
outdated information produced by
periodic MRP runs
 There is no ability to replan quickly if
conditions change due to long run
times
 Prediction of inventory coverage for
critical parts is difficult
 There is no ability to replan if
conditions change during the
planning horizon due to long runtimes
 Faster replanning allowing more
frequent MRP runs in shorter cycles
 Faster reaction to demand changes
 Reduction in inventory and safety
stock levels
 Fast simulation of different what-if
scenarios
 Accelerated calculations such as stock
requirements and where-used lists, as
well as early alerts on critical materials
 Better synchronized demand and
supply for global cross-plant
planning, reducing “bullwhip effect”
 Changes propagated faster through
the supply chain, allowing such
things as more frequent updating for
supply network collaboration
Reduce
days in inventory
and safety stock
1%–5%
Reduce
Improve
inventory
obsolescence cost
(% of revenue)
1%–5%
customer service
level and efficiency
when dealing with
engineering
changes

Today
on SAP HANA
Supply chain analytics
Business value for supply chain monitoring
 Near real-time information is lacking.
 Batch jobs are used to extract data
from planning system to central
reporting, typically on weekly basis
 There is no ad hoc operational
reporting
 Reporting, queries, and dashboards
must be created by each customer
individually
 It is not possible to run sub-daily
planning jobs and analyze the results
because of long data preparation
times in the business warehouse
 This prevents fast response to ad
hoc queries from customers, which
may result in lost sales
 Decision support based on near real-
time information
 Information updates possible via
delta capabilities
 Built-in analytical reporting scenarios
provided with streamlined data load
 Planned ability for customers to add
their own KPIs and dashboards
 Advanced data retrieving and
computing functions of SAP HANA
used to optimize the reporting of
supply chain planning data
Reduce
time spent compiling,
generating, and
waiting for reports
5%–10%
Increase
Optimize
visibility into key
supply chain
performance and
risk indicators
analysis
capabilities with
multiple levels of
aggregation and
drill-down
techniques

Today
on SAP HANA
Collaborative supply planning
Business value for demand-driven supply chain
 Accessing and effectively using
timely demand information from the
supply network are becoming more
and more difficult
 Decisions are often based on
incomplete, inaccurate, and outdated
information
 Hardware and system landscapes
are challenging to administrate
 Increased business and expert user
productivity with faster planning
processes and improved user
experience, as well as by driving
rapid consensus across the supply
chain network
 Near real-time reporting with faster
information analysis, leading to better
supply chain visibility and decision
making
 Improved production and cost
efficiency due to simplified system
setup and administration, as well as
provision of a more robust planning
foundation
Reduce
planning cycle
times
Increase
Reduce
supply chain
performance
total cost of
ownership

Today
on SAP HANA
Financial performance management
Business value for planning, budgeting, and forecasting
 Planning performance is limited to
online analytical processing (OLAP),
staged cubes for transactional and
master data
 Data load performance is driven by
the amount of data extracted from
SAP Business Suite applications
 Reporting, loading, and retraction
performance limits planning iterations
 Drill-down within OLAP cubes and
navigation to SAP Business Suite
and online transaction processing
(OLTP) data occur within standard
times
 Seamless replication of master and
transactional data from SAP
Business Suite
 Availability of more granular data to
support planning
 Big Data challenge negated, allowing
faster extract and DataStore object
(DSO) activation times
 Iterative planning and real-time
simulation supported through
improved performance
 Improved performance for drill-down
(expand) and consolidation (collapse)
 Fast drill-through and live view of
transactional data in SAP Business
Suite
Improve
financial
transparency
Reduce
Minimize
cycle times, month-
end closing times,
and manual effort
cost of financial
reporting

Today
on SAP HANA
Business value for profitability and cost analysis
 Data latencies and processes delays
impact the ability to react to issues
and opportunities
 Lack of data depth and user self-
service affects internal decision
making
 Processes take a long time to run
 Data queries are time-intensive
 Data analysis is mostly manual
 Substantial amount of effort (time
spent) does not directly add value
 Resource efficiency and
effectiveness is suboptimal
 Timely execution of critical business
processes that supports decision
making and increases the ability to
swiftly act (insight-to-action) in
dynamic market environments
 Critical transactions and calculations
able to run quickly
 Instant response times on queries
 Prebuilt analytics to automate the
data analysis process
 Leaner processes from data capture
through data analysis
 Increased productivity through
process-optimized analytics and
mobile support
Improve
cost and profitability
transparency
Reduce
Minimize
cycle times and
manual effort
cost of financial
reporting

Today
on SAP HANA
Business value for financial and managerial reporting
 Risk of noncompliance occurs due to
unfulfilled audits
 Much decision-relevant data is not
readily available
 Data analysis is not supported or
automated
 Batch jobs and reports take a long
time to run
 Data analysis is time-intensive
 A large number of time-consuming,
and non-value-added processes are
required to provide (access)
accurate, up-to-date information
 Timely execution of compliance-
relevant validation tasks
 Increased end-user satisfaction
(accurate, detailed, visualized, timely,
and actionable information)
 Acceleration of key critical-path
processes and reports
 Instant response time on most data
analysis queries
 Workarounds and data latencies
eliminated
 End-user data analysis through self-
service means (via
SAP BusinessObjects business
intelligence solutions)
Improve
service-level
performance
Reduce
Minimize
cycle times, month-
end closing times,
and manual effort
cost of financial
reporting

Today
on SAP HANA
Accounting and financial close
Business value for entity close
 Process take a long time to run
 Reconciliations are time-intensive
 There is limited time for analysis
 Inefficiencies occur due to manual
processes and low automation
 Missing financial excellence
results in higher cost of equity
at the capital markets
 It is difficult to support parallel
financial reporting standards on a
global basis and in simulation of
scenarios
 More time for analysis, less over-
time, and earlier publishing of
financial results through faster
period-end processes and better
reconciliations
 Increased efficiency through smarter
reconciliations and reporting,
reducing operating costs and
improving stakeholder satisfaction
 Real-time analytics down to the
lowest level of detail – delivering
quality at source, transparency, and
process efficiencies
Reduce
month-end
closing time
Reduce
Enhance
cost of finance
compliance and
accuracy

Customer case
Reference
US$100 billion
aerospace and
defense companies
• SAP HANA software, SAP HANA
platform, and SAP Business Suite
on SAP HANA
• Payroll
• Employee competencies
• Inventory and missing parts data
analysis
• Reduction of inventory levels and
customer delivery penalties
Annual
benefit
>US$200
million

Next step
Business scenario recommendation and value discovery workshop
 SAP offers a proven methodology and approach to
discover the customer-specific business
improvement areas and quantify value potential.
 We suggest such a workshop with your
line-of-business and IT experts.
 As starting point, we recommend a performance
and usage analysis of your current system.

Reference US$100 billion A&D companies
Summary of validated scenarios (combined findings)
Feasibility
Businessvalue
SAP HANA use cases mapped to
industry value map end-to-end solutions
Legend
LowHigh
Low High
SAP Business
Suite on
SAP HANA
SAP HANA
products
SAP HANA
Platform
Phase – deployment road map
Annual revenue: US$100 billion
Inventory and
missing parts data
analysis
Payroll
Employee
competencies
report
Reduce inventory
levels and
customer delivery
penalties
2
1
1
1
1 Short term
HR: Payroll (reduce payroll query wait time, reduce
time for it to create a new payroll report, reduce
time spent to consolidate payroll reports)
Employee competencies report (reduce
competencies query wait time)
SCM: Reduce inventory levels and customer
delivery penalties (reduce days in inventory;
reduce customer delivery penalties; reduce
inventory write-offs; reduce the cost of
developing BI reports; reduce data cleanse
costs; reduce IT spend on data integration)
2 Medium term
SCM: Inventory and missing parts data analysis
(reduce inventory and missing parts query
wait time)
SAP HANA Platform: customer-specific
SAP HANA products: SAP NetWeaver BW on
SAP HANA, high-performance applications (HPAs),
apps powered by SAP HANA
SAP Business Suite on SAP HANA
Scenario
(business value)

Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation
sessions and may not be completely validated.
Aerospace manufacturer: Employee competencies report
Aerospace and defense
Business context and goals
 Customer must constantly analyze the required employee competencies for aircraft engineering,
production, assembly, and maintenance and assign the appropriate employees to the
outstanding work
 Based on actual and historical data, the customer also requires simulation capabilities to get
insights into future competencies and hiring needs
Business challenges
 When a query is run to find a particular competency on the overall customer scope, it takes more
than 30 minutes to get a result
 Data for reporting is not current
 2,000 users are currently executing those analysis, with 15,000 expected in future
 It is difficult to execute simulation runs on future competencies and hiring needs
Process innovations
 Competencies reports can be executed on real-time data and fast simulation runs with ad hoc
input parameter settings to deliver high-quality results for future competencies needs
Contribution of SAP HANA
Reports will be compiled directly in SAP HANA database in the SAP NetWeaver Business
Warehouse (SAP NetWeaver BW) application
 Provide competencies dashboard to top management
 Increase internal customer satisfaction
 Better analyze customer competencies capacity thanks to drill-down features
 Increase number of managers getting competencies information from 3,000 to 12,000
Value drivers/KPIs
 Reduce competencies query wait time by 50%
(KPI: Average competencies query wait time, in seconds)
Innovation scope
SAP HANA products (HPAs, apps)
End-to-end (E2E) solution
Aerospace and defense – workforce planning
and analytics
Value potential 3
Feasibility 1
Low High
1 5
Low High
1 5

Aerospace manufacturer: Inventory and missing parts analysis
 Within the aircraft engineering processes, the inventory and missing parts must be monitored
continuously
Business challenges
 Due to the cumbersome data loading process, updated information on inventory and missing
parts are only available on a monthly basis
Process innovations
 Inventory and missing parts monitoring and analysis can be executed on data sets that are
updated daily
SAP NetWeaver BW powered by SAP HANA will improve layered architecture capabilities
 Compile reports directly in the SAP HANA database
 Help ensure accuracy of data
 Help ensure a continuous data loading process for all supply chain management (SCM) data
 Improve inventory and missing parts data loading frequency from monthly to daily
Value drivers/KPIs
 Reduce inventory and missing parts query wait time
(KPI: Average inventory and missing parts query wait time, in seconds)
Innovation scope
Aerospace and defense – project
manufacturing for complex assembly
Value potential 4
Feasibility 1
Low High
1 5
Low High
1 5

Aerospace manufacturer: Inventory and missing parts analysis
 During the aircraft engineering process, inventory and missing parts need to be constantly
monitored and analyzed
Business challenges
 Due to complex and cumbersome loading and report generation process, data is only loaded
once a month in the SAP NetWeaver BW environment. Therefore, all report results are not
based on current inventory information
Process innovations
 Missing parts data are loaded into SAP NetWeaver BW on a daily basis for better decision
support and fast analysis
 Improve layered architecture capabilities for SAP NetWeaver BW
 Enable compiling reports directly in the SAP HANA database
 Enable SCM reporting to be based on near real-time data
 Help ensure accuracy of data
 Help ensure a continuous data loading process for all SCM data
Value drivers/KPIs
 Reduce inventory and missing parts query wait time
(KPI: Average inventory and missing parts query wait time, in seconds)
Innovation scope
Aerospace and defense – service parts
management
Value potential 4
Feasibility 2
Low High
1 5
Low High
1 5

Aerospace manufacturer: Payroll
Innovation scope
Aerospace and defense – core human
resources and payroll
Value potential 3
Feasibility 1
Low High
1 5
Low High
1 5
 Customer manages 4 billion payroll records. Those records are regularly loaded into an SAP NetWeaver BW system,
and reports need to be generated
Business challenges
 Loading the payroll data from SAP ERP to SAP NetWeaver BW takes at 1.5 days each week, and during load time, the
BW system slows down performance for other reporting requests
 Aggregated HR information is hard to get – have to launch several partial reports and consolidate them in Microsoft
Excel
 Getting a report for the business HR team takes a long time
 HR team cannot easily identify the several wage types represented in the pay slips of the country
Process innovations
 HR team can report on daily updated payroll data with fast response time and the ability to drill down to any granular
level (no data aggregation anymore). Ad hoc slicing and dicing of the data improves the identification of wage types per
country.
 Accelerate the loading of data using the customer-specific extractors
 Increase response time for the reports – they can be executed on granular payroll data (no aggregation needed
 Accelerate the loading of data using standard and customer-specific SAP NetWeaver BW extractors
 Improve performance of HR system in SAP NetWeaver BW during the data loading (because of reduced time of
loading)
 Increase internal customers’ satisfaction with better analysis of payroll data thanks to drill-down features
 Produce the HR dashboard on the first day of each month (and not second or third)
 Avoid BI system performance issues during working time (as it is the case today for monthly data loading)
Value drivers/KPIs
 Reduce payroll query wait time by 50% (KPI: Average payroll query wait time, in seconds)
 Reduce time for IT to create a new payroll report by 60% (KPI: Time required to create a new report)
 Reduce time spent to consolidate payroll reports by 40% (KPI: Average time spent to consolidate partial reports in one
consolidated report)

Aerospace manufacturer: Reduce inventory levels and
customer delivery penalties
Innovation scope
Aerospace and defense – supply chain
analytics
Value potential 5
Feasibility 4
Low High
1 5
Low High
1 5
 A leading aerospace and defense manufacturer’s teams need real-time analytics on inventory
levels and customer delivery performance. Significant customer penalties can be incurred if
delivery is late.
Business challenges
 The existing legacy database takes several hours to produce weekly/monthly reports. New
reports can take several weeks to develop.
Process innovations
 Real-time analysis of supply chain and customer delivery performance is required to support
working capital and operating cost reduction
 SAP HANA can enable further innovation in analyzing/modeling business scenarios.
Value drivers/KPIs
 Reduce days in inventory; reduce customer delivery penalties; reduce inventory write-offs;
reduce the cost of developing BI reports; reduce data cleanse costs; reduce IT spend on data
integration

Aerospace manufacturer: MRP
 When this aerospace manufacturer produces a plane, its bill of materials (BOM) is highly
serialized and its MRP run takes about 50 hours to run for one plane. The company also needs to
synchronize the production with suppliers and subcontractors.
Business challenges
 This long runtime doesn't allow the company to have a real-time and synchronized supply chain
with vendors and subcontractors when engineering changes are applied to the BOM
Process innovations
 Run an MRP on SAP HANA and transfer the result to the ERP system
 Speed up the process
 Enable running more frequently
Value drivers/KPIs
 Reduce out-of-stocks
 Reduce errors during production
Innovation scope
Aerospace and defense – project
manufacturing for complex assembly
Value potential 4
Feasibility 4
Low High
1 5
Low High
1 5

Delivering Real-Time Business Value for Aerospace and Defense

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