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Sustainable Innovation usingSAP PLMPLM Conference, SeoulJune 25, 2010Eun Young WonSr. Solution Architect, SAP Korea

Agenda1. Introduction2. SAP Solution Overview3. Summary SAP AG 2010. All rights reserved. / Page 2

Global Trends and Their Impact on:LoB Product DevelopmentConsumer-Driven Sustainable InnovationGlobal Price PressureIncreasing Product Complianceand Corporate RegulationsProduct LiabilityShorter Innovation CyclesDevelopment cost pressure More visibility to customer’s needs,market opportunities, andtechnologies Product portfolio strategy linked withbusiness execution Need to manage innovationprocesses Continuous performance tracking Reduce time to market and increaseefficiencies in Design, Manufacturing,and Service Pressure for continuous product costmanagement and reducedcomponent costs Need for flexible and dynamicdevelopment collaboration networks Need for compliance controls,documentation, and visibility How to introduce a sustainability“culture” and design sustainable andcompliant products How to avoid compliance violationsfrom development, manufacturing,sales, service or recyclingFact: Roughly 80% of all new productsare failing to achieve their expectedresultsFact: About 70% of product costs arelocked down during the design phaseFact: Companies are increasingly beingheld accountable for the environmentaland safety performance of their products SAP AG 2010. All rights reserved. / Page 3

What are the Reasons for Failure?The challenge of disconnected processes and toolsMisaligned or lack of innovationDisconnected Business Processes and Information Missing market insight and portfolio strategy can lead to wasted effort and failing products Limited innovative ideas leads to losing market share and missed revenue opportunities Lack of transparency in innovation execution increases budget spending and failing marketintroductionsProject MgmtProduct g development times and manual effortfor handover to manufacturing and service Missing “single source of truth”Fragmented and ineffective collaboration with partners and suppliers elevatesthe number of change interactions and time consuming optimizationprocessesExcess component and task costs as a result of last minute design changesLack of visibility in production capabilities. Lack of timely and completecommunication of last minute changes SAP AG 2010. All rights reserved. / Page 4Service ead ofServiceMaintenance &ServiceProductReportsHead ovationManagementMarket ReportsHead ofProcurementRamp-Up toProductionHead ofEngineering/R&DComponent& TaskSourcingHead ofMarketingLack of compliance informationand controls Insufficient Sustainability ApproachLack of visibility into completeness of product and processcompliance is increasing the risk of penalty and re-callsLack of accurate compliance reports and audit trailsInsufficient partner network and manufacturing controls

SAP Solutions for LoB Product DevelopmentDeliver innovative products in a world of accelerating changeContinuous Product and Service Innovation: The entire organization needs to ensure a continuous stream of profitable innovationBusiness insights for informed decision makingAligned portfolio strategy with overall goalsLeveraging the right talent, partners and capabilitiesCoordinate and manage innovation roject ManagementInnovation& clingDesign – Sourcing - Ramp-Up2Product Compliance3Product Visualization and CollaborationAuthoring ToolsIntegrated Product Development: Connecting Development / R&D with the BusinessEnables innovative product development, envisioned from marketinsightsFaster time-to-market and accelerated product revenue growththrough focused engineering and active alignment of design withmanufacturing and serviceEnsure quality and scale by embedded quality management SAP AG 2010. All rights reserved. / Page 5Embedded Product Compliance: Being green starts with simply being compliantwith existing regulationsProducts designed for complianceComplete and accurate compliance reportingAutomated compliance analytics and controls

Strategies for Product and Service Leadership& Capability requirements to support these Strategies Business insights by analytics Open Ideation Strategy and roadmapmanagement Portfolio, resource, time andbudget management Project planning andexecution Project collaboration andcompliance Portfolio and Projects linkedwith Business Execution SAP AG 2010. All rights reserved. / Page 6 Collaborative engineering inand beyond the enterprise Requirements and customerneeds management Efficient, visualcommunication Synchronized productstructure management acrossproduct lifecycle phases Development integration toManufacturing and Service Support of sustainable andcompliant product design Manage and trackcompany and globalstandards like REACH,RoHS, and WEEE Comprehensive andembedded changemanagement acrossorganizational disciplines

Agenda1. Introduction2. SAP Solution Overview3. Summary SAP AG 2010. All rights reserved. / Page 7

SAP’s End to End Process Centric StrategyFlexibility and integration to achieve Product and Service ringServiceContinuous Product and Service Innovation(NPDI)Integrated Product DevelopmentEmbedded Product ComplianceContinuous Product Change SAP AG 2010. All rights reserved. / Page 8

Continuous Product and Service Innovation(NPDI)Solution Highlights New and harmonized userinterface (UI) for portfolio andproject management Deepen the integration of projectand portfolio management (PPM)with the SAP Product LifecycleManagement application to alignportfolio with product definition Extend integration of PPM andproject system functionality in SAPERP to align portfolio planning withexecution Comprehensive process supportfor capital project portfoliomanagement New Idea Management solution Financial planning and resourcemanagement enhancements Enhanced reporting capability withbusiness context viewer SAP AG 2010. All rights reserved. / Page 9

Continuous Product and Service Innovation(NPDI) SAP AG 2010. All rights reserved. / Page 10

Powerful Project Planning andExecutionVersion Comparison in Gantt Chart SAP AG 2010. All rights reserved. / Page 11

Integrated Product DevelopmentSolutions for Discrete IndustriesSolution Highlights Embedded Product Visualization forfaster and better communication Decision Support via Business ContextViewer Role-based easy to use user interface Direct collaboration Offer guided process for reconciliationbetween Engineering-BOM andManufacturing-BOM Synchronize and compare items’structures and attributes High-level product definition, like aconcept BOM Functional structures and views withintegrated variant configuration andsimulation Support for change management withboth date and parameter affectivity Dependency matrix CAx integration with variant assemblymanagement SAP AG 2010. All rights reserved. / Page 12

Integrated Product DevelopmentSolutions for Discrete Industries SAP AG 2010. All rights reserved. / Page 13

Integrated Product DevelopmentSolutions for Discrete IndustriesEngineering eering Change ManagementProduct Structure & Assembly ManagementManage Complexity with Simplicity SAP AG 2010. All rights reserved. / Page 14ManufacturingEnvironment

Integrated Product DevelopmentSolutions for Process and CP IndustriesSolution highlights Use new UI for recipe management Generate labels directly from recipemanagement Create ingredient, allergen, andnutrition statements automatically Calculate recommended dietaryrequirements automatically Assemble and transform formulainformation into a final view of yourlabel Use the business context viewer forprocess industries embedded inSAP PLM Use compliance checks to complywith regulations quickly and beforeproduct launch SAP AG 2010. All rights reserved. / Page 15

Integrated Product DevelopmentSolutions for Process and CP Industries SAP AG 2010. All rights reserved. / Page 16

Embedded Product ComplianceEnsure compliance and reduce risksSolution highlights Improved support of REACHregistration process for discreteand process industries Management of discrete andprocess compliancechecks simultaneously Support of additionalregulations, such as GHS Integrated compliance checksin procurement and productionprocesses Product intelligence providescomprehensiveproduct analytics, compliance,and sustainability reporting SAP AG 2010. All rights reserved. / Page 17

Embedded Product ComplianceEnsure compliance and reduce risks SAP AG 2010. All rights reserved. / Page 18

Continuous Product ChangeEnsure consistency, transparency and reduce process timeSolution highlights Minimizes the impact ofproduct related changes byproviding changemanagement centricworkflows and transparencyacross the product life cycle Ad hoc workflow Flexible and dynamicWorkflow folder management Change process analytics totrack and maintain workflowprocesses SAP AG 2010. All rights reserved. / Page 19

Agenda1. Introduction2. SAP Solution Overview3. Summary SAP AG 2010. All rights reserved. / Page 20

Companies Today are Driving ValueContinuous product andservice innovation (NPDI)Integrated productdevelopmentEmbedded productcompliance

SAP’s Leadership in PLM SpacePLM Direct Revenue Leaders 2009Source: CIMdata PLM Market Analysis - 2009 Report (Revenue excludes CAD related revenue) SAP AG 2010. All rights reserved. / Page 22

SAP has a Strong Position in a FragmentedEnvironment “SAP has the broadest PLM reach across all manufacturing industries among all of these PLM providers byleveraging its enterprise resource planning (ERP) customer base.” “ there are significant improvements in PLM usability in SAP's PLM 7.0. IT managers see SAP PLM as anopportunity to reduce costs and improve data transparency across product development, manufacturingoperations, the back office and customer-facing activities.” “Many Gartner manufacturing clients choose to employ SAP PLM in tandem with product design, manufacturingengineering and product data management capabilities from specialty PLM software providers, because SAP's focuscomplements, rather than competes with, most of its PLM competitors. However, the advances in PLM 7.0 willencourage Gartner clients, particularly discrete manufacturers, to take a closer look at replacing existing bestof-breed offerings with SAP.” “We recommend that SAP ERP customers explore SAP's PLM 7.0 capabilities, because the ERP softwareincludes a significant percentage of SAP's PLM capabilities already.”“Industry Depth Is Crucial When Selecting a PLM Vendor” by Marc Halpern of GartnerGartner: April 2009 / Seite SAPSAP2009AG 2010.All23rights reserved. / Page 23

Analysts Commend SAP Sustainability Actions“SAP has placed itself in poleposition and, in doing so, revitalizedand repositioned an already leadingorganization”“SAP Maps the Corporate Sustainable Future:Enterprise-Wide Sustainability Software Comes of Age”January, 2010, Stephen Stokes & Bill Polk SAP AG 2010. All rights reserved. / Page 24The SAP Sustainability Map “is oneof the first tools in the market thatoffers a comprehensive overview ofthe multidimensional challenges ofcorporate sustainability, withrelevant software solutions toaddress them.”“Case Study: SAP’s Sustainability TransformationHow To Save The World And Tap Into A Multibillion-Dollar Market”December, 2009, Holger Kisker

SummaryProduct Development processesare changing – The times ofunstructured processes, time forfailure and communication viaSpreadsheets are gone Reduced “Time-To-Profit” can beachieved by a balancedorchestration of ProductDevelopment strategies (PortfolioOptimization, DevelopmentEfficiency, Quality Excellence)SAP provides a comprehensiveapproach and solutions to supportEngineers and R&D departmentsAS WELL AS the entire Enterpriseto achieve this goal SAP AG 2010. All rights reserved. / Page 25

Thank you!