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Transform Your Chemical Organization into an

Intelligent Enterprise

Achieve Value with Intelligent ERP

SAP Value Paper | PUBLIC

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Overview Strategic Priorities E2E Scenarios SAP Value Proposition ReferencesSAP Strategy

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The Power of Intelligent ERP

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Taking Chemical Companies to the Next Level with Intelligent ERP

The digitalization of businesses across all industries is happening at a rapid pace. Chemical companies are therefore facing challenges from numerous areas. These include the

changing price of raw materials and geopolitical climates, erratic demand patterns, mass commoditization and customization of products, complex supply chains, the transition to

digitalization, competition from new companies, and more regulations and environmental pressure than before. How does a digital foundation with a true single source of truth help?

Agility for Rapid Changes

A digital foundation is an IT architecture that offers stability and long-term reliability

for core enterprise processes yet also provides the flexibility to adapt quickly to new

opportunities, challenges, and regulations. This solid foundation gives you a single

source of truth, which in turn enables flexibility for innovation to accommodate new

business models, new regulations, and business events, such as mergers or

acquisitions.

Simulation, Prediction, and Analytics

The ability to respond quickly to changing customer and market needs is more

important than ever in today’s highly competitive and dynamic world. To do this,

simulation, prediction, and analytical capabilities across core functions such as

product development, manufacturing, supply chain management, and sales are

critical success factors for intelligent insight. This insight must be at a granular level,

so that decision-makers have all the information they need to assess trends,

opportunities, and risks – anytime, anywhere.

Real-Time Data Insight

Every chemical company needs the computing capability to carry out complex

algorithms with large data sets to support timely, real-time analysis. Everyone in

the company as well as in the ecosystem must have access to the data they

need, whenever and wherever they need it, so that suppliers can stay up to date

with a company’s orders, salespeople can see customer history for credit risk and

stock information, and plant people can see production status and provide

accurate delivery schedules.

Focus on Innovative Services and Business Outcomes

Chemical customers today more than ever demand innovation. Companies are

responding with new products, services, and even business-outcome-based

models that better meet customer needs. To achieve this, end-to-end (E2E)

collaboration and communication across internal and external departments and

lines of business are pivotal to success.

The Intelligent Enterprise

Bringing SAP S/4HANA® and SAP’s Business Technology Platform together as a digital foundation will result in a more flexible and intelligent enterprise. To achieve next-generation

business processes, chemical companies need Intelligent ERP that can be continuously enhanced and extended with innovative business services and applications built on emerging

technologies, including machine learning, block chain, and the Internet of Things (IoT). Chemical companies that have big innovation appetites or prefer to be early adopters have

already begun this journey.


REHAU Polymers (Suzhou)

We used SAP Intelligent Robotic Process Automation to automate use cases that

required significant manual intervention and redundant work. This saves us time and cuts down on human error, and our employees

are spending more time on innovative work.

“

Chengbo Yu, CIO, Asia Pacific Region, REHAU Polymers China Co. Ltd

Read the business transformation study

”

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Decreased Upload time of 1,000

accounting documents –from 4 days to 10 minutes

Drive Business Value with Intelligent ERP: SAP S/4HANA Customer Stories


https://www.sap.com/documents/2020/03/601181f4-8b7d-0010-87a3-c30de2ffd8ff.html

The digital economy is disruptive. Chemical companies need strategic priorities that drive transformation. SAP supports a reimagined set of E2E business scenarios to support

the strategic priorities of working in a digital environment.

Strategic Priorities in a Digital Economy

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Sell business outcomes instead of products

Connect to and collaborate with your customers, understand and become

part of their value chains, and leverage digital technology to deliver

innovative services and business outcomes instead of selling products.

E2E scenario: Customer-centric, collaborative R&D – Collaborate on

new trends, technologies, and ideas, and develop new business and

revenue models.

Simplify to shrink cycle times

Run simulations and predictive models, enable real-time sense and

response, and leverage IT and operation technology integration and the

IoT to reduce time to market, streamline operations, maximize asset

performance, and minimize rework.

E2E scenario: Integrated operations management – Meet customer

and market needs quickly and reliably through collaborative research and

development.

Compete as an ecosystem

Capitalize on open innovation, leverage extended manufacturing networks,

go beyond the boundaries of your existing value chain, and understand your

customer‘s customers’ needs. Adopt the capability to flexibly redesign your

network and relationships in line with market dynamics.

E2E scenario: Digital farming – from traditional value chain into

business network – Bring together various stakeholders on a single

platform to feed the world.

Adopt strategic agility in response to market dynamics

Adjust strategy and portfolio dynamically in response to market

opportunities and needs, grow rapidly into new markets or segments,

and capitalize on mergers, acquisitions, and spin-offs to secure

continued growth in a challenging global environment.

E2E scenario: Closed-loop mergers and acquisitions – Establish a

strategic vehicle for sustainable growth.


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Sell Business Outcomes Instead of Products

*Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with line-of-business and cloud capabilities. As each enterprise is at a different level

of maturity, our recommendation is that you work with SAP to determine the value proposition for your enterprise.

Customer-Centric, Collaborative R&D

Top value drivers*

Traditional scenario

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A new world with SAP

▪ The R&D process is reactive due to a lack of insights into future trends

and needs from further down the value chain.

▪ R&D is limited to purely internal knowledge spread across various teams

and databases. It lacks insight into available intellectual property (IP).

▪ R&D is bound to sequential, time-consuming lab trials, increasing time to

market.

▪ Limited capabilities to respond rapidly to changes in regulatory compliance

and legislation create a high risk of supply chain disruption.Limited insights

into future trends

and market needs

Limited access to

best available

knowledge and IP

Multiple time- and

cost-consuming

lab trials

High risk of supply

chain disruption

and brand damage

▪ Advanced sentiment analysis supported by machine learning helps to

proactively spot and respond to emerging trends.

▪ Close collaboration in open innovation networks and establishing a

knowledge database supported by machine learning allow companies to

maximize reuse and capitalize on the IP of the entire ecosystem.

▪ Simulating and predicting product and formulation properties and

performance through machine learning reduces time to market and time to

value.

▪ Simulating the ecological footprint along the entire lifecycle and the impact

of new regulatory requirements on revenue and marketability of products

enables companies to mitigate the risk of supply chain disruption and

protect the company brand.

Accelerate sentiment analysis

of future trends

Establish searchable

IP database

Simulate product performance

and ecological footprint

Respond quickly to new

regulations and legislation

Collaborate in open

innovation platforms

Faster Time to market

Increased Revenue

Reduced Costs

Increased Brand recognition

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Simplify to Shrink Cycle Times



Integrated Operations Management

Top value drivers*


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▪ Inability to understand the potential impact of an event on one or

multiple downstream processes

▪ Inability to choose the best solution to a problem due to missing

functionality to completely model multiple solutions

▪ Minimal integration between operation and management systems

▪ Advanced sentiment analysis supported by machine learning

identifies trends.

▪ Collaborating in open innovation networks supported by machine

learning maximizes reuse and capitalizes on the IP of the entire

ecosystem.

▪ Simulating and predicting product and formulation properties

reduces time to market and time to value.

Reduced Process cycle times

Faster Response time

Reduced Cost and waste

Support For new business processes

Plan Execute Monitor React

Plant

historian

Plant data

collection

Machines Sensors Building

management

Plant

database

Manufacturing

execution

system

Not fully

integrated

ImpactExecute MonitorPlan

Real-time alerting, monitoring, and remediation

Intelligent technologies from SAP

Automation

DCS*

PLC*

MES* Plant

database

Plant data

collectionLIMS* Wireless

integration

SCADA*

HMI*Environmental

building management

Sensors Machines

*DCS = Distributed control system

*PLC = Programmable logic controller*HMI = Human-machine interface

*LIMS = Laboratory information

management system*SCADA = Supervisory control and data acquisition

*MES = Manufacturing execution system

Plant

historian

React

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Compete as an Ecosystem



Digital Farming – From Traditional Value Chain into Business Network

Top value drivers*


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▪ Sale of agrochemicals through wholesalers leads to

limited influence on farmers’ buying decisions.

▪ Competitive differentiation is limited to products and

their prices.

▪ Profitability depends on the volume of products sold.

▪ Suboptimal use of agrochemicals has a negative

environmental impact due to limited insight and

understanding of the best way to treat a field.

▪ Equipment breakdowns cause critical and time-

consuming delays.

▪ Direct marketing of agrochemical products makes it possible to provide

decision support to farmers.

▪ Competitive differentiation based on superior services allows for best

treatment of fields.

▪ Outcome-based business models offer success that depends on yield that

could be achieved rather than on product volume that was sold.

▪ The connected agriculture IoT includes smart machines, drones, and robots

that enable smart data collection and automation. This supports insights and

optimization at levels below the square meter.

▪ Predictive maintenance and service improve equipment availability.

▪ Crop care and nutrients optimally applied to specific problems enable

farmers to achieve the best results from each square meter of soil and crop.

Improved yield Per farm unit

Increased Uptime of farm equipment

Reduced Overall costs

Increased Brand recognition for the entire ecosystem

Farmer

Best local

and demand-

fitting variety

Tailored fertilizer

and crop protection

(chemical and

biological)

Sensor

technology and

mobile data

exchange

Improved

supply chain

managementRisk

management

Climate,

crop, soil, and

product data

Farm and

field data

exchange

Seed

producer

Chemical

companies

Machine

manufacturer

Trader and

industry

Banking and

insurance

Weather

stations and

laboratories

Technology

and solution

provider

Grain mills, oil mills,

sugar refineries,

and ethanol

processing plants

Farm

equipment

Agritrading

companies

(soft commodities)

and cooperatives

Soft commodities:

grain, coffee,

cocoa, sugarcane,

and oilseeds

Meat (pigs, cattle,

and poultry), fish,

and dairy products

Livestock trading

companies and

cooperatives

Slaughtering

and milk

processingBreeding, medicine,

nutritional supplements,

and farm equipment

Seed, fertilizer, and

crop protection

Provision

of input

Agricultural production

and farmingOrigination

and trading

Commodity

processing

Food manufacturing

and packaging Retail Consumer

An

ima

lsC

rop

s

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Adopt Strategic Agility in Response to Market Dynamics



Closed-Loop Mergers and Acquisitions

Top value drivers*


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Traditional core functionality of SAP® software limited to postmerger integration

Acquisition integration (prebuilt models, integration frameworks and technology)

Closed-loop, E2E process to cover mergers, acquisitions, and divestitures in their full scope, from predeal evaluation to postmerger integration and divestitures

Increased Market share

Realized Synergies

Increased Revenue growth

Monitoring synergies (executive oversight, analysis of key value drivers)

Target screening

(white-space analysis, risk

profiles)

Opportunity development

(scenario simulation,

methodology, templates)

Estimated costs of integration

(platform planning,

assumptions, metrics)

Acquisition integration

(prebuilt models, integration

frameworks and technology)

Monitor synergies

(executive oversight,

analysis of key value

drivers)

Divestitures

(carve-outs, impact

simulation, value to market)

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Intelligent ERP Is the Foundation of an

Intelligent Enterprise

Intelligent enterprises run agile, integrated business processes and use

advanced technologies such as artificial intelligence, machine learning,

and the Internet of Things.

They apply leading-edge industry best practices and work together to

build flexible value chains. They evaluate and act on customer, partner,

and employee sentiment, and they understand and manage their

environmental impact. This makes them resilient, successful, and

sustainable.


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SAP Strategy – Deliver the Intelligent Enterprise

Intelligent suite – helps to run agile, integrated business

processes. We help manage every part of the organization

– employees, customers, products, spend, finance, and IT.

With embedded analytics, we offer a 360-degree view of the

business.

Experience management – helps organizations evaluate

and act on customer, partner, and employee sentiment.

Understanding what your stakeholders want and how they

feel is critical to making the right decisions.

Business network – helps customers digitalize

cross-company business processes. The network builds

on our procurement, travel, and contingent workforce

solutions. It helps our customers work together to build

flexible value chains.

Business Technology Platform – provides data

management and analytics and supports application

development and integration. It also allows our

customers to use intelligent technologies – such as artificial

intelligence, machine learning, and the Internet of Things

– to drive innovation.

Sustainability management – helps customers understand

and manage their impact on people and the environment.

Climate 21 is the name of our initiative behind our new crop of

sustainability management solutions. These solutions help

businesses understand and manage greenhouse gas

emissions.

Industry cloud – allows customers to discover and

deploy vertical solutions from SAP and partners.

These help customers apply leading-edge industry

best practices and extend current business processes.

BUSINESS TECHNOLOGY PLATFORM

INTELLIGENT SUITE INDUSTRY CLOUDAPPLICATIONS

TECHNOLOGY

BUSINESS

PROCESS

EXPERIENCE MANAGEMENT

SUSTAINABILITY MANAGEMENT

Across all functions

BUSINESS NETWORK


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SAP S/4HANA Provides New Capabilities to Enable the Strategic

Priorities of Chemical Companies

SAP S/4HANA

Innovations

Sell Business

Outcomes

Instead of

Products

Simplify to

Shrink Cycle

Times

Compete as an

Ecosystem

Adopt Strategic

Agility in

Response to

Market Dynamics

▪ Collaborative sourcing and contract management

▪ Product compliance

▪ International trade

▪ Enterprise formulation (product lifecycle management recipe development)

▪ Service operations and processes

▪ Service ticket intelligence

▪ Service billing

▪ Predictive and live material requirements planning

▪ Demand-driven replenishment

▪ Operational and service procurement

▪ Central finance

▪ Digital boardroom

Economic Value Added

Increased profitability

(revenue and costs)

Optimized usage of capital

(working capital and equipment)

▪ Advanced available to promise

▪ Real-time inventory

▪ Predictive stock in transit

▪ Project and portfolio management

▪ Product compliance

▪ Constraint based planning

▪ Extended warehouse management

▪ Extended transportation management

▪ Maintenance execution

▪ Environment, health, and safety

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▪ Alternative-based confirmations

▪ Supply assignment during backorder processing

▪ Analysis of delivery performance

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SAP S/4HANA provides chemical companies with a proven framework to adopt industry best practices while attaining operational excellence across the full value chain.

Strategy enablement

▪ Accelerate creation of new business models

▪ Enter new markets and industries

▪ Accelerate synergy for mergers and acquisitions

▪ Run live (SAP Digital Boardroom)

▪ Reorganize on the fly

▪ Achieve greater speed and agility

▪ Run simply (master complexity)

▪ Manage risk and ensure compliance

Empowered employees

▪ Higher productivity with a new,

role-based way of working with responsive,

intuitive SAP Fiori® user experience on all devices

▪ Role-driven, user-centric processes and self-service

business intelligence for user empowerment

▪ Actionable insights on unified, real-time data

and processes with built-in system suggestions

for decision support

Business benefits*

▪ 10%–20% increase in revenue from new products

▪ 10%–15% reduction in R&D expenses

▪ 1%‒5% reduction in manufacturing cost

▪ Up to 10% reduction in manufacturing cycle time

▪ 5%–10% decrease in unplanned asset downtime

▪ 10%–15% reduction in service and maintenance costs

▪ 12%–15% reduction in days of inventory

▪ 10%–15% reduction in total logistics cost

▪ 10%–20% increase in customer satisfaction

▪ 25%–50% reduction in cycle time for financial

forecasting and reporting

▪ 10%–15% reduction in procurement function costs

IT benefits and total cost of ownership (TCO)

▪ Reduced data footprint

▪ Merging of OLAP and OLTP

▪ Elimination of many desktop clients

▪ Lower testing costs

▪ Simplified landscapes

▪ Native integration

IT benefits

and TCO

Business

benefits

Strategy

enablement

Empowered

employees

SAP’s Value Proposition for Chemical Companies




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Döhler

Industry:

Chemicals

Users in accounts receivable really like SAP Cash Application. It saves them

time that can be spent on nonadministrative tasks such as following up on

unpaid invoices. And it is an important milestone in our journey to digitally

transform the finance function.

“

Harald Muley, Head of Corporate Functions IT, Döhler GmbH

”SAP solutions:

SAP Cash Application,

SAP Cloud Platform Integration

service, SAP Early Adopter Care

program, and SAP S/4HANA

Customer Web site:

www.doehler.com

Click here to read the business

transformation study

The accounts receivable team at Döhler GmbH saves time with a 20% boost in the

number of automated financial postings using SAP Cash Application software. The

team can thus focus more on nonadministrative tasks such as following up on unpaid

invoices. Due to the fast and accurate end-to-end reconciliation process, in a matter

of minutes, the accounts receivable team can pull items from SAP S/4HANA, run

them through SAP Cash Application, and repost to the ERP system.

Customers Are Achieving Value with SAP Solutions


http://www.doehler.com/

https://www.sap.com/documents/2019/07/ea230e77-587d-0010-87a3-c30de2ffd8ff.html

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Kolon Group

Industry:

Chemicals

We have plans to use SAP S/4HANA across Kolon Group. Thanks to the

guidance from SAP Digital Business Services [now the Customer Success

organization], we will be able to expand this conversion project on our own,

following the methods and best practices recommended by SAP.

“

SunGui Jun, Director of Operations Management, Kolon Benit, Kolon Group

”SAP solutions:

SAP S/4HANA and

SAP Fiori user experience

Customer Web site:

www.kolon.com


transformation study.

As a major chemical company producing a wide range of specialty products,

Kolon Group relied on the SAP ERP and SAP Business Warehouse applications to

manage complex business processes. Since converting SAP ERP to SAP S/4HANA,

costs are down and productivity is up.



http://www.kolon.com/

https://www.sap.com/documents/2017/10/c2e117b6-d97c-0010-82c7-eda71af511fa.html

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/15 15

Ballance Agri-Nutrients

Industry:

Chemicals

Supported by SAP software, we are building intuitive, mobile solutions that

help farmers work more productively.

“

David Scullin, CIO, Ballance Agri-Nutrients

”SAP solutions:

SAP S/4HANA, SAP Business

Warehouse application powered by

SAP HANA®, and SAP Commerce

and SAP Marketing solutions

Customer Web site:

www.ballance.co.nz


transformation study

Ballance Agri-Nutrients Ltd. wanted to provide New Zealand’s farmers with a

streamlined customer experience and the information needed to support sound

nutrient-management decisions. By establishing a digital platform based on SAP

solutions, the company has simplified order processes and is enabling its customers

to farm more productively and sustainably.



http://www.ballance.co.nz/

https://www.sap.com/documents/2018/10/a69b3659-247d-0010-87a3-c30de2ffd8ff.html

Studio SAP | 59704enUS (20/10)

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