Learn how BASF is transforming all procurement, supplier management, and source-to-contract processes for direct, indirect, and packaging spend. Having onboarded more than 20,000 suppliers, BASF is qualifying and segmenting them by region, commodity, and plant. The company is also enforcing that qualification in its sourcing processes.

1. PUBLIC
March 2018
Dr. Juergen Eberz, BASF
Direct & Indirect Procurement
Transformation at BASF

2. 2PUBLIC© 2018 SAP SE or an SAP affiliatecompany. All rights reserved. ǀ
Public
Optimizing inventory with direct spend supplier collaboration-
Ulta Beauty (SID 56695)
OR
Recent innovations in direct sourcing (SID 56812)
Welcome to SAP Ariba Live. Don’t miss these sessions on direct spend!
11:30am Direct & indirect procurement transformation at BASF
(SID 56554)
OR
Recent innovations in supply chain collaboration (SID 56816)
TIME TUESDAY MARCH 21 WEDNESDAY MARCH 22
12:30
Digitalized supply chain collaboration-GE Power (SID 56547)1:30pm
2:30pm
3:00pm
4:00pm Future of design-to-deliver supply chains-Microsoft (SID 56560)
Manage your supply chain by exception
(SID 56574)
Product
deep-dive
Supply chain
use case
Direct sourcing
use cases
Tuesday Wednesday
Collaborating with direct spend suppliers in the life
sciences industry-with Stryker (SID 56556)
OR
Finding the right supplier performance & lifecycle management
solution (SID 56685)
3:30pm
Quality collaboration innovation demo (SID 59103)
Transforming all spend for greater value-Ford Motor
& Raymond Corp (SID 56697)
OR
Enable end-to-end product specification & direct
sourcing (SID 56564)
Supply chain
use case
Direct
sourcing
use
cases
Supply chain
use case
Product
deep-dive
Transforming direct spend sourcing processes in discrete
manufacturing – Microsoft and Yaskawa Electric (SID 56558)
OR
Improve strategic sourcing & category management with
new article management capabilities (SID 56563)
Product
deep-diveRetail industry sourcing workshop (SID
56796)
OR
Recent innovations in supplier management
(SID 56795)
11:30am
2:30pm
3:00pm
Direct sourcing use cases

3. Direct & Indirect Procurement
Transformation
Dr. Juergen Eberz, BASF
March 2018

4. Agenda
1
2
3
BASF at a glance
Procurement roadmap & BASF 4.0
Implementation projects

5. Agenda
1
2
3
BASF at a glance
Procurement roadmap & BASF 4.0
Implementation projects

6. BASF – We create chemistry
6
 Our chemistry is used in almost all industries
 We combine economic success, social
responsibility and environmental protection
 Sales 2017: €64,457 million
 EBIT 2017: €8,522 million
 Employees (as of December 31, 2017):
115,490
 6 Verbund sites and 347 other production sites

7. Chemicals – a growth industry
Global annual growth rate of ~3.6%*
7
* Average annual real change 2018-2020; BASF Report 2017 p.121
… more food needed
by 2050
… more primary energy
consumption by 2050
… of the world population
will live in cities by 2050
Agriculture Health &
nutrition
Energy &
resources
TransportationConstruction
& housing
Consumer
goods
… people by 2050
Electrical
& electronics
Chemistry as enabler to meet current and future needs
70% 50%~10bn 30%

8. BASF’s segments
8
Crop
Protection
Performance
Products
Dispersions &
Pigments
Care
Chemicals
Functional
Materials &
Solutions
Agricultural
Solutions
Nutrition & Health
Performance
Chemicals
Oil & Gas
Oil & Gas
Chemicals Functional
Materials &
Solutions
Construction
Chemicals
Coatings
Catalysts
Performance
Materials
Monomers
Intermediates
Petrochemicals

9. BASF worldwide – sites
9
Regional centers
Selected sites
Verbund sites
Selected research and development sites
Hong Kong
Nanjing
Kuantan
Freeport
Florham Park
Geismar
Ludwigshafen
Antwerp
São Paulo

10. Agenda
1
2
3
BASF at a glance
Procurement roadmap & BASF 4.0
Implementation projects

11. Innovation driver BASF 4.0 – Strategic fit and high speed
development towards a fully integrated network with our partners
11
Technical
Infrastructure
Enablers for
Networks with
P2P Partners
Industry
4.0
„Augmented Reality” Artificial Intelligence:
Automated buying (source-to-contract), machine learning
Big Data Analytics:
Demand planning, visibility
Cloud Computing:
Ariba software as a service
Internet of Things:
e.g. sensors trigger ordering
Mobile Devices:
Ariba
0101
1010
3D printing

12. Procurement processes as Commodity: Guiding Principle
12
Procure-to-Pay Process (PTP) Strategy
Digital Business Interaction
 Fully integrated business process networks with our partners
 Improved business-to-business collaboration
Digitalization
 Standardization of processes
 Transparency of business data
Process Performance Management
 Process performance indicators
 Data/ process mining
Process Intelligence
 Process automation
 Policy based processes
Reduction of process costs
 Consolidation of heterogeneous IT landscape
 Preferred implementation of cloud-based market solutions
Why Cloud for PTP?
 No focus on process differentiation
 Market solutions from best in class cloud provider:
 Fast innovation cycles
 Network capabilities
 Policy based process automation
 Low cost of ownership
2015 2017 2020
Evolution Trend of PTP IT Landscape
Trend
Core
Other
Non Core (Cloud)

13. Ariba as Enabler in „Digitalization“
Supplier Management In „Digitalization“
o
n
S
P
a
n
d
b
e
y
o
n
d
13

14. SAP Ariba Solution Portfolio at Procurement in BASF
14
Source Procure
planned
in scope
out of scope
Supplier Management
Strategic
Sourcing
Procurement
Financial
Supply Chain
Supplier Risk
Supplier Lifecycle &
Performance
SAP Analytics Cloud
Sourcing
Contracts
Buying
Buying & Invoicing
Ariba Catalogue
Commerce
Automat.
Ariba
Payables
Supply Chain
Finance
Ariba Pay
Discount Pro
Pay

15. Strategic Procurement Suite as the foundation for many further
improvements of procurement system landscape
15
 Tool for exchange of operational procurement documents
(Purchase Orders, Invoices, Advanced Shipping Notifications)
 Leveraging joint supplier network
 Frontend for SSC sourcing activity
 SPS as precondition for procurement desk
 Deep integration with SPS sourcing processes
 Further efficiency driver for tactical procurement
 Reporting tool based on business warehouse
integrated into SPS frontend
 Providing transparency on operational data
 Helping to make SPS the single tool strategic buyers
use in their daily work
 Tool for dynamic discounting, leveraging sourcing inputs
 Simplified entry point in purchasing process for
requisitioners
 Builds on outcome from SPS such as contracts and
preferred supplier information
 Leveraging joint master data
 Globally unified catalog procurement system with
ERP backend integration
 Leveraging joint supplier network and
organizational master data with SPS
 Risk management tool embedded in SPS Supplier
Management Module
 Future potential to include risk/ sustainability
information in sourcing decisions
Guided
Buying
Supplier
Risk
Discount Pro
Vendor
Interaction
Portal:
(VIP)Ariba
Procurement
Catalog
(APC)
Procurement
Desk
SAP
Analytics
Cloud
Strategic
Procurement
Suite
(SPS)

16. Agenda
1
2
3
BASF at a glance
Procurement roadmap & BASF 4.0
Implementation projects

17. Strategic Procurement Suite: Full Project Scope
17
Registration Phase OutQualification Segmentation
Performance
Management
Disqualification
RfX
Preparation
Contract
Management
RfX
Execution
Offer
Evaluation
Negotiation
Contract
Award
Globally aligned innovative
processes and integrated system for
strategic procurement
Global standard tool implemented
across all regions
Key performance indicator for
supplier management and source-to-
contract
Supplier Management
Source-to-Contract
Deliverables

18. Strategic Procurement Suite Benefits based on three Pillars
18
 Full contract coverage
(paper contracts and offline
negotiation)
 Single tool for electronic
sourcing processes
 Tool for strategically managing
the supplier portfolio and
supplier collaboration
Supplier Management
Co-Innovation as foundation for full functional coverage
 Process integration with
sourcing and contract lifecycle
management
 Control of supplier portfolio
 Process efficiency
 Increased competitiveness /
savings focus
 Spend transparency
 Transparency on contract
coverage
 Compliance
Benefits
SourcingContract Lifecycle

19. SAP Ariba at BASF – Strategic Procurement Suite at a glance
19
Sourcing with SPS
 With the sourcing module BASF is able to source within their own
business processes.
 BASF is able to source, monitor, report and control within one tool.
Supplier Management with SPS
 With the supplier management module BASF is able to connect sourcing directly
with their suppliers. Moreover, BASF can monitor, register and qualify new suppliers
and connect them with the backend system.
BA

20. Key Facts – SPS Rollout wave 1
(Last update Feb. 22nd 2018)
20
Progress &
Status of SPS
Rollout
SPS is available in languages
Supplier Onboarding
544
Trainings
Sourcing
Buyers trained globally on SPS
Number of RfPs and auctions published per month and per procurement
class in all 4 regions (April to Feb.)
projects have been created with
SPS
Global Go live
Last Go live:
• Hub Central: April
• Hub Emerging 4: May
Languages
registered suppliers
• English
• German
• Portuguese
• Spanish
• Italian
8
3.465
25.033
• Chinese
• Korean
• Japanese

21. Successfully co-developed functions
21
Supplier Management
 Joint development of new supplier
management module (SLP)
 Qualification matrix by region and category
 Preferred supplier status
Sourcing
 Integration of supplier status into the
sourcing process
 New bonus/ penalty function
 Enhanced surrogate bid function
 Enhancement of ERP Integration functions
Supplier Management
 Raw material qualification process
 Supplier hierarchy in master data and end-to-
end process
Sourcing
 New sourcing user experience
 Hierarchical material master for chemicals and articles
Contract Lifecycle
 New contracts user experience
 Full integration between sourcing and CLM
 Integrated qualification status check
 Full end-to-end integration into ERP
More to come in Wave IIIn Wave I

22. Industry standard enhances collaboration with partners
22
Create „network of choice“
 Connectivity provider with industry
know-how
 Include relevant supplier
community and key industry
partners
Industry standard:
Inter-connectedness through hub structure
 Cloud-based industry standard to replace
company-specific legacy systems
 Reduce interfaces = reduce complexity = increase benefits
 Long-term view: Open standard / „Roaming“ to enable collaboration
between different solution providers
No industry standard: Landscape with
individual connectivity solutions
BASF
Supplier A
Customer B
Yesterday
BASF
Supplier A
Customer B
…
…
Supplier B
Customer C
Tomorrow

23. Catalog Migration – further opportunities
Cleansing of Buying channel for catalogs
 Focus on catalog suppliers with high transcation numbers
Long Tail spend
 Further automation potential for long tail spend
 Synchronize with Shared Services rollout
● Automatize first, optimize later
– Supplier consolidation
– Demand driven
Direct Integration
 Top 20 of catalog suppliers represent 80 % of catalog POs p.a.
 E2E direct connection highly beneficial for P2P
 Will suppport digitalization in procurement and finance
23

24. Ariba Discount Pro
24
1. Send approved
invoices to AN
2. View invoices available
for early payment
3. Take early discount
Buyer
Supplier
5. Process
PayMeNow (PMN)
document in SAP.
7. Disburse payment to supplier via check or electronic mechanism
6. Send Remittance
document (optional)
4. Update SAP with
payment proposal
(PPR Document)

25. Co – Innovation SAP Ariba / BASF
Lessons learned
Deep alignment needed
with Ariba implementation
& support teams
Establish Program-
Management from the
beginning
Do not view on single modules
independantly from the rest –
clarity on target picture
Be open to process-
changes – welcome to the
cloud
Agile approach with early
prototyping – start small and
simple

27. 27PUBLIC© 2018 SAP SE or an SAP affiliatecompany. All rights reserved. ǀ
Public
Optimizing inventory with direct spend supplier collaboration-
Ulta Beauty (SID 56695)
OR
Recent innovations in direct sourcing (SID 56812)
Which session to join next? Don’t miss these sessions on direct spend!
11:30am Direct & indirect procurement transformation at BASF
(SID 56554)
OR
Recent innovations in supply chain collaboration (SID 56816)
TIME TUESDAY MARCH 21 WEDNESDAY MARCH 22
12:30
Digitalized supply chain collaboration-GE Power (SID 56547)1:30pm
2:30pm
3:00pm
4:00pm Future of design-to-deliver supply chains-Microsoft (SID 56560)
Manage your supply chain by exception
(SID 56574)
Product
deep-dive
Supply chain
use case
Direct sourcing
use cases
Tuesday Wednesday
Collaborating with direct spend suppliers in the life
sciences industry-with Stryker (SID 56556)
OR
Finding the right supplier performance & lifecycle management
solution (SID 56685)
3:30pm
Quality collaboration innovation demo (SID 59103)
Transforming all spend for greater value-Ford Motor
& Raymond Corp (SID 56697)
OR
Enable end-to-end product specification & direct
sourcing (SID 56564)
Supply chain
use case
Direct
sourcing
use
cases
Supply chain
use case
Product
deep-dive
Transforming direct spend sourcing processes in discrete
manufacturing – Microsoft and Yaskawa Electric (SID 56558)
OR
Improve strategic sourcing & category management with
new article management capabilities (SID 56563)
Product
deep-diveRetail industry sourcing workshop (SID
56796)
OR
Recent innovations in supplier management
(SID 56795)
11:30am
2:30pm
3:00pm
Direct sourcing use cases

28. Thank you.
Contact information:
Leah Knight
Solution Marketing
SAP Ariba Solutions for Direct Spend
leah.knight@sap.com

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