Direct materials sourcing, contracting, and supplier management processes are often more complex than indirect, and spend value is significantly higher, especially in large global, diversified companies. Manufacturers must harness the buying power of their global business units and ensure that negotiated savings are fully realized in their execution processes. Join this session to learn how a diversified global manufacturer is achieving all of this and more.

1. PUBLIC
thyssenkrupp’s Procurement Transformation:
Minimizing Direct Materials Contract Leakage
While Reducing Supply Chain Risk

2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
 Leah Knight, Solutions Marketing
thyssenkrupp
 Jens Kläsener, Strategy & Development, Procurement & Supply Management
SAP Ariba (SAP)
 Florian Seebauer, Senior Director, Direct Procurement
Agenda

3. 3PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
 Leah Knight, Solutions Marketing
thyssenkrupp
 Jens Kläsener, Strategy & Development, Procurement & Supply Management
SAP Ariba (SAP)
 Florian Seebauer, Senior Director, Direct Procurement
Agenda

4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba Solutions for Direct Spend
We are making
significant investments
in streamlining direct
materials source-to-
settle processes.
Planning
collaboration
Contract
Source
Planning
Design
Manage
ERP and planning
integration
Execution
collaboration
Manufacture
SAP Ariba
Solutions for
Direct Spend
End-to-end
process
management
Total landed
cost
calculation
Collaborative
planning
Collaborative
supply chain
execution
Network
intelligence
Supplier
onboarding
Advanced
negotiation
and supplier
selection
Support for
services and
materials

5. 5PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
 Leah Knight, Solutions Marketing
thyssenkrupp
 Jens Kläsener, Strategy & Development, Procurement & Supply Management
SAP Ariba (SAP)
 Florian Seebauer, Senior Director, Direct Procurement
Agenda

6. 6 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp procurement supply management (PSM) strategic positioning2
Overview thyssenkrupp1
Agenda

7. 7 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp procurement supply management (PSM) strategic positioning2
Overview thyssenkrupp1
Agenda

8. 8 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Source: thyssenkrupp AG
• Key indicators – fiscal year 2015/2016
• Sales > 39 bn € ~ 470 Group Companies
• Adjusted EBIT ~ 1.5 bn € ~ 80 countries, ~ 2,000 locations
• Material cost 23.5 bn € > 156,000 employees
“Ingenieurkunst”
Engineering or the ability to
connect competencies
• Components Technology - Elevator Technology - Industrial Solutions -
Materials Services - Steel Europe - Steel Americas

9. 9 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Engineering expertise for sustainable progress for our customers
Product and service examples in our application areas
Mechanical
Energy
Slewing bearings
and rings for wind
turbines
Construction
Up to 66% greater
energy efficiency in
elevators
Automotive
Valve control enables
4.1 t less CO2 per
vehicle over lifetime
Minerals & Mining
Fully mobile crushers
enable up to
350,000 t less CO2
per year
Plant
Construction
Up to 40% reduction
in CO2 emissions in
cement plants
Automotive
Development of
production lines for
lithium-ion battery cells
Chemicals
EnviNOx®: Up to 99%
reduction in N2O/NOx
in fertilizer plants
Chemicals
Process technology
for polylactides: New
plastics based on
biomass
Materials
Automotive
High-strength steel
reduces weight by
up to 30%
Energy
Non-oriented electrical
steel reduces energy
transmission losses
Construction
Optimized corrosion
protection through zinc-
magnesium coating
Packaging
Ultra-thin packaging
steel improves resource
efficiency by 23%

10. 10 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp – Strategic Way Forward
Key initiatives
Strategic
push
Financial
stability
Performance
orientation
Customers &
markets
People
success
Organic
growth:
Expand
market
positions
Strengthen
innovation &
technology
Inorganic
growth
Balanced
portfolio
Strong cash
flow position
Gearing
<100%
Equity > 15%
Investment
grade
Brand
thyssenkrupp
Market
intelligence
Sector
strategies
Customer
relationships
Sales
excellence
Active
portfolio
management
Capital
efficiency
Continuous
benchmarking
Operational
excellence
Functional
excellence
Profitable
growth
Mission
statement
Leadership
Network
organization
Governance
Compliance
Systems &
processes
HR Global
2020
People
excellence
Employee
survey
Safety &
health
Diversity &
inclusion
HR
transformation
Diversified Industrial More & Better, Sustainability
Change
management

11. 11 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Leading engineering expertise supports global sustainable progress
Source: thyssenkrupp AG
Globalization
More resource
and energy use
Urbanization
More infrastructure
and buildings
More consumer
and capital goodsDemography
Reduced CO2
emissions,
renewable energies
Climate
change
Efficient resource
and energy use,
alternative energies
Finite
resources
Compliant products
& services
Regulation
& politics
Leading
engineering
expertise
Smart data,
integration, and
holistic solutions
Increasing
connectivity
Digitization
More digital
value creation
“More” “Better”

12. 12 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp procurement supply management (PSM) strategic positioning2
Overview thyssenkrupp1
Agenda

13. 13 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp Procurement & Supply Management (PSM) – Key directions for further
optimization of functional value contribution and efficiency
Source: CO/PSM
Turn
spend into
value
for tk
Drive and leverage automation & digitization
We clearly follow our PSM Strategic Way Forward
Drive technical levers along the Product Lifecycle
- Address full spend strategically with less local effort
- Local employees acting as network resources in clusters
for faster measure implementation with higher added value
- Stringent implementation and utilization of existing and
new systems and solutions (e.g. pronet/SAP Ariba) for
high efficiency
- Align activities and targets with cross-functions for new
bottom / top-line effects, ensuring optimum resource utilization

14. 14 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Successful businesses are increasingly networked and digitized – inside and out
Source: thyssenkrupp AG
Prof. Yochai Benkler,
Harvard University
“The world is becoming
too fast, too complex and too
networked for any company to
have all the solutions inside.”

15. 15 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Network building step 1: Closely connected internal procurement network involving all
thyssenkrupp businesses, regions and functions
For illustration purposes only, not comprehensive, individual business entities not depicted
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
tk
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
BA
BA
BABA
BA
RHQ
RHQ
RHQ
RHQ
RHQ
tk
AG
BA
Global Supply Markets
 Shared functional procurement
strategies and aligned targets that
deliver business value
 Joint commitment to highest levels of
professionalism
 Flexible, agile structures involving
businesses,
regions and functions
 High synergy utilization from knowledge
and task sharing

16. 16 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Network building step 2: Cluster teams positioned to implement material field strategies
and ACT AS ONE thyssenkrupp in global supply markets
tk
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
Global Supply Markets
BA
BA
BA
BA
BA
RHQ
RHQ
RHQ
RHQ
RHQ
tk
AG
C
C
C
C
C
C
C
C
C
C
C
CC
C
C
C
C
C
C
BA
For illustration purposes only, not comprehensive, individual business entities not depicted
 Cluster Teams set up as virtual agile
teams, firmly anchored in tk / PSM
network
 Responsible for translating business
strategies and supply market intelligence
into innovative, value adding material
field strategies
 Possible future step: digitize and
combine strategy documentation and
real-time supply market intelligence for
faster decision-making

17. 17 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Network building step 3: Clusters bring strategically selected suppliers into a high-performing
network
For illustration purposes only, not comprehensive, individual business entities not depicted
tk = thyssenkrupp BA = Business Area RHQ = Regional Headquarters
Source: thyssenkrupp AG
tk
Global Supply Markets
C
C
C
C
C
C
C
C
C
C
C
CC
C
C
C
C
C
C
BA
BA
BABA
BA
RHQ
RHQ
RHQ
RHQ
RHQ
tk
AG
BA
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
SupplierSupplier
Supplier
Supplier
Supplier
Supplier
Supplier
SupplierSupplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
 Cluster Teams strategically select best
suppliers for tk
 Suppliers to be digitally connected to tk
processes and systems for high
transparency and efficiency, without tk
loosing agility or market leverage

18. 18 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Efficient and effective collaboration between multiple internal and external partners requires
standardized common processes and formats
Source: thyssenkrupp AG
Big step forward to digitization and smart collaboration for thyssenkrupp procurement together with strategically
selected solutions provider
Implementation ongoingAmbitious rollout target: Three strategic modules to be
rolled out globally in 24 months (> 250 legal entities)
Supplier life-cycle
• Supplier Registration
• Supplier Qualification
• Supplier Evaluation
• Supplier Development
• Supplier Phase-out
Contract life-cycle
• Contract Drafting,
Negotiation & Approval
• Storage & Repository
• Contract Compliance
• Monitoring & Search
Tendering & and
negotiations
• eRfI
• eRfQ / eRfP
• e.bidding & e.auctions
• Awarding
Self-service procurement
• Enablement of
supplier
and tk-internal
catalogs
• Automated catalog
verification
• Integrated with SRM
Electronic data exchange
• Business Network for
Supplier Collaboration
• Transactions such as
- PO exchange
- Invoice exchange
- Supply Chain
capabilities
Integrated „Source to Contract“ process Operational procurement

19. 19 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
thyssenkrupp group companiesdaproh*
pronet replaces the current stand-alone solutions and will be integrated into the daproh / ERP system
world - Invest to gain even higher efficiency through further integration for (direct) sourcing
Non SAP system
thyssenkrupp pronet
SRM
Group Master Data
System (GMDS)
- Global Supplier Master
Data-
Local non-daproh
ERP System (SAP)
Local daproh ERP
System (SAP)
Catalog Ordering
+
*) daproh – data & process harmonization
Local ERP System
newnew new
Distribute contract ERP
create outline agreements
Integration enhancement
to upload BOM/BOS
Connect non daproh-systems
e.g. tkE US Oracle

20. 20 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Involvement of PSM in PLM process
Today the main involvement of PSM professionals takes place after Requirements Engineering phase.
Source: CO/PSM
Design-to-Cost
Simultaneous Engineering
Production & Logistics ConceptsValue Engineering
Demand Planning …
Supplier Innovation Roadmap
Market Intelligence
Standardization, Substitution
Value Analysis
Future direction of PSM involvement
From operational to more tactical & strategic

21. 21 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
pronet as enabler for full integration of PSM in cross-functional collaboration
illustrative
powered by
Purchase to order/pay

22. 22 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
Full procurement contribution from creating strong bottom-line and top-line effects throughout
integrated value chains
Source: thyssenkrupp AG
SUPPLIER`S
SUPPLIER
CUSTOMER END
CUSTOMER
SUPPLIER
Linking our suppliers Linking our internal
cross-functions
Linking our customers
Creating new (digital) products, services, solutions, business models with suppliers

23. 23 Thyssenkrupp PSM – Vision on pronet / SAP Ariba 2017-04-10
pronet / SAP Ariba solutions fully aligned with daproh IT-Strategy – further involvement into
daproh templates required

24. 24PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
 Leah Knight, Solutions Marketing
thyssenkrupp
 Jens Kläsener, Strategy & Development, Procurement & Supply Management
SAP Ariba (SAP)
 Florian Seebauer, Senior Director, Direct Procurement
Agenda

25. 25PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Fulfill SettleMarket
Buyer management
Procure SettleSource
Supplier management
Integration to SAP and non-SAP solutions, secure,
open platform
SAP Ariba solutions in the
context of the digital economy
BuyerSupplier
Ariba Network
Spendcategories
Direct
Indirect and MRO
Contingent labor
Travel

26. 26PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba Supplier
Lifecycle and PerformanceSAP Ariba ContractsSAP Ariba Sourcing
Pricing
conditions
Product
sourcing
Supplier qualification and segmentation
User experience + SAP Cloud Platform + integration of SAP ERP and non-SAP solutions
A new layer of innovations to support direct materials sourcing
Volume and
price
forecasting
Product
costing
Supplier
perf.
automation
Advanced
optimization
Multilevel bill
of materials
(BOM)
Service
item
hierarchy
SAP Ariba Strategic Sourcing Suite
Product
lifecycle
mgt
integration

27. 27PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Legend: Available scenario. Potential starting points of the process are indicated with the following symbol:
SAP Ariba Sourcing
“BoM manager”
Ariba Network
“Supplier”
SAP Ariba Sourcing
“Sourcing manager”
SAP ERP
* Price history and trend is based on sourcing price acceptance
SAP Ariba Strategic Sourcing Suite
Application innovation: product sourcing flow
Sourcing
price
acceptance
Part
360-degree
view*
Part
worklist
BoM
Purchase
info
record
Supplier
response
Simple
RFx
SAP PLM BoM
BoM
Pin
BOM
Assign
part owner
Configurationdata
Masterdata

28. 28PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Legend: Potential starting points of the process are indicated with the following symbol:
SAP Ariba
Contracts
Ariba Network
Supplier /USE
SAP Ariba
Sourcing
SAP ERP
SAP S/4HANA
Integration between SAP Ariba Sourcing, SAP Ariba Contracts, and SAP ERP
Sourcing
request
RFX
auction
Sourcing
project
RFQPR
Operational
contract
Purchase
order
Supplier
response
Award
Contract
workspace

29. 29PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Supplier-managed
information
SAP Ariba Supplier Management architecture
Common supplier record
Other
ERPs
MDG-S
Other DWs
SQL and
NoSQL DBs
SAP Business
Suite and
other ERPs
Two-
way
sync
Syncbusinessprocess
Syncbusinessprocess
SAP Ariba Supplier Lifecycle and Performance
Vendor
model
Qualification
matrix
Segmentation
matrix
Spend
matrix
SAP Ariba source-to-settle application suite
Onboarding
Due diligence
and
qualification
Segmentation
Performance
management
Development
and phase-out
News
sources
Government
sources
Ratings
sources
Financial
sources
External data sources
SAP Ariba Supplier Risk

30. 30PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Questions?

31. 31PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Which session to join next? Don’t miss these breakout sessions on direct spend supply chain,
sourcing, and supplier management!
16:00: SAP Ariba Product
Strategy Road Map for
2017 (SID 50650)
Direct spend use
case
Wednesday, June 14Monday, June 12 Tuesday, June 13
11:00: ThyssenKrupp’s Procurement
Transformation in Direct Spend (SID 50631)
13:45: Extending Your SAP Supply Chain Systems to Suppliers
with SAP Ariba Solutions for Direct Spend (SID 50958)
14:45: Strategic Procurement Transformation at BASF
(SID 50632)
15:45: Innovations in Product Sourcing
(SID 50658)
16:45: Discovering SAP Ariba Solutions for Direct Spend with
Ariba’s Product and Innovations Leadership Team (SID 50634)
9:00: SKF and Avery Dennison:
Sourcing Multiple Spend Categories in a
Single Platform (SID 50633)
10:15: Strategic Sourcing Workshop
(SID 50679)
12:00: SAP Ariba Strategic Sourcing Design to
Execution End to End (SID 50963)
9:00: SAP Ariba Strategic Sourcing:
Multilevel BOM, Simple RFx
(SID 50965)
14:15: SAP Ariba Supply Chain Collaboration
(SID 50962)
10:00: SAP Ariba Supply Chain
Collaboration: Manage Your Supply
Chain by Exception (SID 50964)
Direct spend use case
OR
Direct spend use
cases
17:15: Ariba Network:
Supply Chain Today, Vision
2017 and Beyond
(SID 50558)

32. 32PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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33. Thank you.
Contact information:
Leah Knight, Florian Seebauer
leah.knight@sap.com
f.seebauer@sap.com