Deployment of smarter commerce concepts in B2B electronics environments

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This presentation wa held at 2012's Smarter Commerce Summit from IBM in Madrid, Spain. It was a joint effort with IBM clients's SMA Solar Technology AG providing an example of the topic raised in the first half of the presentation.

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<ul><li> 1. 1 BI-329 Smarter Commerce in B2B Electronics: Transforming Sales and Service to Increase Revenue and Customer Loyalty Thorsten Schrer, IBM Werner Bueker, SMA Solar </li> <li> 2. 2 Agenda Industry Introduction1 Smarter Commerce in a BtB Electronics world2 Smarter Commerce @ SMA Solar Technology AG3 Q &amp; A4 </li> <li> 3. 3 The Electronics Industry varies in the adoption speed and domains of Smarter Commerce The planet really gets smarter when everything else starts going to smarter business models Consumer Electronics Semicon- ductor Network Equipment Medical Devices Power &amp; Automation Equipment Office Equipment </li> <li> 4. 4 Power &amp; Automation Equipment Industry The Industry at a Glance* Power and Automation Market is a very fragmented business with 5% growth till 2015 with major shift Emerging Market &gt;2x vs. Mature Markets Key market drivers include environmental awareness, renewable, energy/process efficiency, services, emerging economies and power Market is based on slower sales cycles, longer product life cycles, BtB selling process, high systems and product complexity, comfortable, safe, and sustainable The competitive environment is characterized by a product centric approach where leading technology and price are today the key differentiators Mixing product, software and services and network connectivity is the next big wave for rapid re-alignment of market share and profitability within the Power &amp; Automation Equipment Industry. </li> <li> 5. From Product to Services Software Analytics Integration Marketing Program &amp; project management End-to-end outsourcing Usage-based pricing Control &amp; management systems Smart device capability Capturing data from sensors Creating insight &amp; action New value creation Orchestrate an ecosystem Network-based competition Changing behavior to optimize the usage of infrastructure Capturing end user demand CE market sprinted ahead in transforming products into services, BtB Electronics will follow fast. Smarter Commerce can help to support this transformation. </li> <li> 6. 6 Agenda Industry Introduction1 Smarter Commerce in a BtB Electronics world2 Smarter Commerce @ SMA Solar Technology AG3 Q &amp; A4 </li> <li> 7. 7 Smarter Commerce solutions addresses key challenges of Power &amp; Automation Equipment manufacturers MarketBuy Service Sell Customer Engineering Outsourcing Revenue and margin generation via service transformation Supply chain planning (S&amp;OP) Supply Chain network and inventory optimization Supply Chain Visibility B2B integration Procurement Transformation Customer Awareness &amp; Analytics Digital Marketing Optimization Cross-division selling Order Management &amp; Fulfillment BtB shop solutions Payments &amp; Settlements Enterprise Sellers believe change is coming for B2Bbut not yet, and not quickly..but it will come faster and bigger then they think. </li> <li> 8. 8 A: Deployment Example Supply Chain (1/2) Operational Complexity addressed via Smarter Inventory and Service Management The Situation One Global parts DC with multiple regional DCs 40.000 SKU and total material movement for 9000 items per year 14 000 items in active price list with Inventory value 17 m Excess safety stock inventories Unpredictable customer service levels is key compelling reason to act. </li> <li> 9. 9 A: Deployment Example Supply Chain (2/2) Operational Complexity addressed via Smarter Inventory Management Current State The Outcome From ~85% to ~94% service level with constant inventory Inventory reduction by ~4M with constant service level of ~85%. ROI &lt; 1 year Distribution network optimization provides further opportunities 1 2 3 </li> <li> 10. 10 B: Deployment Example Marketing (1/2) Automated nurturing works to progress customers through their buying journey + 100 points = Automated eNurturing QualifiedQualified Lead passed to Sales Registers and downloads paper Registers and downloads paper 10 points Downloads ROI tool 15 points Registers/ attends event 50 points Receives email for BAO ROI tool 5 points Receives email invite to BAO event LDR calls to qualify 10 points 25 points Prospect searches for ROI on solutions 5 points 0-10 POINTS 50-100 POINTS +100 POINTS Awareness Interest Preference Action </li> <li> 11. 11 SWG Traditional Multi-touch Program (3Q10 - Feb 11) SWG Automated Response Nurturing (3Q10 - Feb 11) Emails Sent Open Click-through Responses 2.38M emails/372 tactics* 7.37% 0.73% 0.03% 61K emails/207 tactics** 15.59% 3.63% 3.30% 2X 5X 100X B: Deployment Example Marketing (2/2) Automated Nurture Accelerates Results </li> <li> 12. 12 Agenda Industry Introduction1 Smarter Commerce in a BtB Electronics world2 Smarter Commerce @ SMA Solar Technology AG3 Q &amp; A4 </li> <li> 13. 22.05.2012 SMA Solar Technology AG Energy that Changes </li> <li> 14. SMA Solar Technology AG Disclaimer 14 This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of SMA Solar Technology AG (the Company) or any present or future subsidiary of the Company (together with the Company, the SMA Group) nor should it or any part of it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. All information contained herein has been carefully prepared. Nevertheless, we do not guarantee its accuracy or completeness and nothing herein shall be construed to be a representation of such guarantee. The information contained in this presentation is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the managements current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements as a result of, among others, factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward- looking statements which speak only as of the date of this presentation. This presentation is for information purposes only and may not be further distributed or passed on to any party which is not the addressee of this presentation. No part of this presentation must be copied, reproduced or cited by the addressees hereof other than for the purpose for which it has been provided to the addressee. This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933 as amended. </li> <li> 15. SMA Solar Technology AG Solar power continues to become more cost-effective Sources: Federal Environment Ministry (pilot study 2010), German Solar Industry Association (PV roadmap) 15 Electricity price in euro cents per kilowatt hour (Germany) &gt; In Germany, in the past 10 years alone, the costs of generating solar power have dropped by over 60%. &gt; Solar power is already more cost-efficient than conventional household electricity. &gt; A long-term, affordable energy supply requires further subsidies over the short-term in order to provide incentives for additional investments in system and storage technology. The costs of generating solar power in Germany are already below the household electricity price. 1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary </li> <li> 16. SMA Solar Technology AG SMA is the global market and technology leader for solar inverters: &gt; Comprehensive product range &gt; Global presence &gt; Flexible production &gt; Service excellence &gt; Innovative strength &gt; Special corporate culture Company story 16 1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary </li> <li> 17. SMA Solar Technology AG The inverter is technologically the most important component in intelligent energy management systems 17 Sunny Boy converts direct current into alternating current and provides reactive power to stabilize the grid Sunny Home Manager controls consumers and Sunny Backup system Sunny Backup system provides for temporary storage and offers a grid-quality power supply with protection against outages Bluetooth radio-controlled socket with measuring function provides for the activation of appliances via the Sunny Home Manager Bi-directional battery charger SMA Sunny Portal for energy forecast, remote monitoring and home energy management . With SMA products, solar power can be consumed directly in the place where it is produced. 6 1 2 3 2 3 4 5 5 6 4 1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary 1 </li> <li> 18. SMA Solar Technology AG SMA has a defined roadmap to reduce the specific costs of inverters 18 &gt; Analysis of those components that represent 80% of the material costs &gt; Change of assembly and testing processes &gt; Increase the speed of switching and thus reduce the size of windings &gt; Highly integrated microelectronics &gt; Reduction of housing size and packages 96% 99% 14% 27% 30% 48% 93% We strive to reduce by half the specific costs of a solar inverter by 2015. Cost reduction and efficiency increase Research &amp; development focus 1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary </li> <li> 19. SMA Solar Technology AG 19 SMA is represented in 19 countries all over the globe In 2011, we achieved over 50% in sales abroad. Canada USA Chile Germany Belgium Czech Republic France Greece Italy Poland Portugal Spain United Kingdom Australia China India Japan South Korea Thailand United Arab Emirates South Africa 1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary </li> <li> 20. SMA Solar Technology AG Professional sourcing 20 SMA only produces to order &gt; Weekly forecast meetings &gt; Global sourcing &gt; Stock of critical components We doubled our annual production capacity to 11.5 GW within three month and we follow a very fluctuating market. Flexible production Inverter output sold (in MW) +40% 61% +109% &gt; Low capital intensity &gt; Outsourcing &gt; Temporary employees 1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary </li> <li> 21. SMA Solar Technology AG The customer clocks the SMA logistics chainThe customer clocks the SMA logistics chain Consumption control where possible, demand control where necessary Supplier Kanban Flexible suppliers 1:4 Electronic supplier integration VMI, C-parts management Consumption control where possible, demand control where necessary Supplier Kanban Flexible suppliers 1:4 Electronic supplier integration VMI, C-parts management Make to order Controlled range and optimized inventories Kanban Delivery without storage Targeted material flows Transport and production-optimized packaging Make to order Controlled range and optimized inventories Kanban Delivery without storage Targeted material flows Transport and production-optimized packaging Automated order entry Sensible automation Forecast with optimal utilization of customer knowledge Consolidation of locations Freight bundling Automated order entry Sensible automation Forecast with optimal utilization of customer knowledge Consolidation of locations Freight bundling Coupling of planning for orders, production and material requirements from customer to supplier through integrated IT systems Lean logistics (e.g., minimum handling, short distances, flow principle, synchronization) Coupling of planning for orders, production and...</li></ul>