As manufacturers become more reliant on their direct spend suppliers, supply chain processes become more iterative and collaborative. Learn from DuluxGroup, a major process manufacturer, how it has leapfrogged traditional collaboration means like EDI and extended collaboration efforts to large and small suppliers alike in its paperless factory initiative.

1. PUBLIC
Paperless Supply Chain Collaboration at
DuluxGroup

2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
Leah Knight
Solutions Marketing,
SAP Ariba Solutions for Direct Spend
Agenda
DuluxGroup
Ian Griffith
Head of Procurement

3. 3PUBLIC© 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
Management
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

4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba (SAP)
Leah Knight
Solutions Marketing,
SAP Ariba Solutions for Direct Spend
Agenda
DuluxGroup
Ian Griffith
Head of Procurement

5. DuluxGroup
Implementation of SAP Ariba Supply Chain
Collaboration for Buyers
August 2017

6. DuluxGroup is a diverse organisation centered around a core of
Premium Brands...
* Distributed brand

7. …Employing approximately 4,000 people across the globe…

8. …With a focus on Brand Management, Innovation and Customer
Service
New Dulux Wash&Wear Trusted Brand Awards Digital Engagement
Selleys Ezi PressZero Rapid 1hr WeedkillerB&D Smart Phone Control Gen 2

9. Business Strengths
Iconic premium
brands with ‘top of
mind’ awareness
Demonstrated track
record of product
and technology
innovation
Distribution
breadth, with
excellent customer
relationships
Supply chain
excellence
Niche ‘foot-hold’
positions offshore,
including in a
number of Asian
countries
Experienced board
and employees with
extensive industry
experience
Strong financial
profile, excellent
cash flow
generation and
attractive yield
Market leadership
in Australia, New
Zealand and Papua
New Guinea

10. Financial Dimensions
~A$2.5 billion
A$1.03
billion
Roughly split three ways across
Indirects, Directs and Finished Goods
Third Party Spend Revenue
Market capitalisation:
2015 Group
NPAT
A$1.72
billion
Net profit after tax
A$130.4
million

11. Within A/NZ, DuluxGroup operates 15 factories – with a new paints factory
coming on line in Melbourne this year
DuluxGroup A/NZ Manufacturing Network
Paints factory
Sealants factory
Gardencare factory
• Network currently consists of 15
factories across A/NZ
(with a further 6 outside of A/NZ)
• Each factory has 50-100 suppliers of raw
materials and packaging
• Majority of suppliers supply multiple
factories (especially within each
Division)
• Total direct* suppliers ~500, both local
and international, across a broad
spectrum of industries and categories
Garage doors factory
New state-of-
the-art paints
factory coming
on line end 2017
* Direct purchases relates to purchases of raw materials, packaging and finished goods for resale, for deliveries to
DuluxGroup factories and warehouses

12. Up until around three years ago, DuluxGroup managed all of its direct supplier
transactions using a highly manual process
Supplier Transactions – Legacy Process
DuluxGroup ERP
(SAP ECC 6)
Sales Forecast
Supplier’s Inbox
Supplier’s ERP
Purchase
Order
(pdf)
Invoice
(pdf)
Email to
DuluxGroup
DuluxGroup A/P
Inbox
Delivery
Docs
(hardcopy)
3 way match to
pay invoice
Email to
Supplier
Automated data transfer
Manual data transfer
At least three manual data
entries per purchase order…

13. Over recent years, as the company grew in both scale and
complexity, the manual process became increasingly problematic
Issues with Legacy System:
• Total number of invoices processed manually for direct purchases* reached ~50,000pa and growing, placing a substantial burden
on both sites and accounts payable staff
• Significant potential for keying errors and misplacing of documentation
• Minimal transparency between DuluxGroup and suppliers, e.g. no visibility of receipt of documents and payment and delivery
status, so frequent low-value communications between the parties chasing up simple information
* Direct purchases relates to purchases of raw materials, packaging and finished goods for resale, for deliveries to
DuluxGroup factories and warehouses. A further ~150,000 invoices are processed for indirect purchases

14. Three years ago, DuluxGroup embarked on a project with its key suppliers to
establish EDI and address the issues and inefficiencies in the legacy process
Supplier Transactions – EDI
Sales Forecast
Supplier’s ERPEDI creates an “electronic pipe”
along which documents can
travel in both directions
Purchase
Order
P.O.
Acknowle-
dgement
ASNInvoice
Delivery
Docs
Barcode Scan
Supplier’s ERP
Supplier’s ERP
Supplier’s ERP
Supplier’s ERP
Each EDI connection is unique to the supplier, making EDI
challenging to implement for a large number of suppliers
DuluxGroup ERP
(SAP ECC 6)
3 way match to
pay invoice

15. While EDI greatly improved the efficiency of interaction with our major suppliers,
it was not considered practical for connecting all suppliers
Implementation of EDI:
• Over the course of ~2 years, DuluxGroup established EDI connections with 14 of its most significant suppliers (only paints
factories) – in so doing, ~1/3 of the direct invoice load was converted from the legacy manual system to a paperless system
- Establishing the EDI connections required co-ordination between DuluxGroup IT and the various suppliers’ IT teams, as well as
investment on both sides
- On average, establishing an EDI connection has taken ~6 months, although this has varied widely by supplier, and came at a
cost (up to $50k with one supplier)
• Once operational, EDI connections have driven efficiency and reduced error rate compared to the legacy system, but they do
require discipline to operate, e.g. incorrect pricing on a P.O. is difficult to reset
• Over the course of establishing our EDI connections, DuluxGroup came to the realisation that it would not be practical to
implement EDI across the board, as smaller suppliers would be unable to justify the investment, and the time taken would be
excessive

16. With the new paints factory in Melbourne (coming online October 2017),
DuluxGroup identified SAP Ariba solutions as the best way to go full paperless
selection of SAP Ariba solutions and Development of Business Case:
• The new factory will be a world class, highly automated paint manufacturing facility – and importing a paper-based purchasing
process would have been at odds with the guiding principles of the design
• Recognising that EDI did not present a practical solution for all suppliers, DuluxGroup sought a technology solution that would
enable full paperless purchasing while being simple and inexpensive for suppliers to engage with and operate – any need to co-
ordinate DuluxGroup IT and suppliers’ IT teams would prove fatal
• The SAP Ariba solution quickly became the preferred solution due to its tight integration to our backend system. DuluxGroup also
found that SAP Ariba solutions offered greater Supply Chain Collaboration for Direct materials, compared with competitors
focused only on indirects. The business case was founded on three key points:
1. Achievement of paperless purchasing in time for the opening of the new factory – and in line with the guiding principles of the
design
2. Future proof – SAP’s ongoing investment in SAP Ariba solutions, and DuluxGroup’s ongoing alignment with SAP, meant SAP
Ariba solutions gave the strongest level of confidence that DuluxGroup would not be revisiting the question in years to come
3. Efficiency gains more than offset the cost of implementation and ongoing licensing

17. Ariba
Network
Upon finalization of the business case (Dec 2016), DuluxGroup integrated with
Ariba Network, and so far has 60+ suppliers already trading over the network
Supplier Transactions – SAP Ariba solutions
DuluxGroup ERP
(SAP ECC 6)
Sales Forecast
Supplier’s ERP
Purchase
Order
P.O.
Acknowle-
dgement
ASNInvoice
Delivery
Docs
Barcode Scan
3 way match to
pay invoice –
and becomes
visible to
supplier
DuluxGroup integrated
with Ariba Network as
the key first step in the
project
Suppliers are able to
select how they connect
to Ariba Network, i.e.
fully integrated, fully
enabled or light account
Supplier’s ERP
Supplier’s ERP
Supplier’s ERP
Supplier’s ERP
The key benefit of the portal is
that any number of suppliers
can be added without further
integration by DuluxGroup
Invoice
check –
match to
P.O.

18. In summary, DuluxGroup has taken a two-step approach to achieving paperless
processing, and is approaching a complete phase out of manual data transfer
DuluxGroup Site Ordering/ Receipting – Journey to Paperless
Traditional 1st Step (end 2016) Final State (end 2018) – Fully Paperless
• In the past, all orders were manually receipted,
with a manual invoice/ P.O. matching process
undertaken by A/P
• Over the last three years, 14 of the largest suppliers
have migrated to EDI (Paints only), allowing
machine-to-machine information transfer and RFID
receipting
• The top 14 represent ~80% of total spend, with the
~20% of spend in the “tail” representing >300
suppliers still operating under the “traditional”
model – transitioning these to EDI in any
meaningful timeframe is not feasible
• At this point, EDI suppliers are unaffected, and will
continue to trade over EDI
• For the “tail”, all communications are required to
use Ariba Network to communicate with
DuluxGroup, with all relevant documentation
provided electronically in both directions
• Once fully implemented, this will allow 100% bar
code scan receipting and eliminate the manual
paperwork associated with direct purchasing
Manual transfer
Electronic transfer
DG ERP
Suppliers’
ERPs
DG ERP
Suppliers’
ERPs – Tail
Suppliers’
ERPs – Top 14
DG ERP
Suppliers’
ERPs – Tail
Suppliers’
ERPs – Top 14
Ariba
Network
EDI EDI

19. DuluxGroup has rolled out SAP Ariba solutions for supply to its paint factories and
warehouses, with plans to roll out to all other factories over the next 1-2 years
Progress of Roll Out to Date:
• Four waves of roll outs so far, at around one per month for the last four months:
- Wave 1: 5 suppliers, selected for their strategic nature as suppliers and willingness to participate early in the project
- Wave 2: A further 16 suppliers, focused on suppliers who will supply to the new factory (as well as their supplies to our other
factories)
- Wave 3: A further 19 suppliers, picking up on suppliers to our warehouses
- Wave 4: A further 24 suppliers, including a lot of our smaller suppliers, who have typically gone with the “Light Account” option
• All suppliers who will be supplying to the new paints factory are now either EDI connected or trading over SAP Ariba solutions, so
DuluxGroup will achieve a “paperless start up” of the new factory
Plan from this Point:
• One more wave of suppliers to the paints business
• A wave of sub-contract suppliers (contract packers, toll manufacturers, etc) – greater level of process change at supplier’s end
compared to other supplier categories
• Separate waves for suppliers to the New Zealand paints business, the Selleys business, the Yates business and ultimately the B&D
business. Also potential to convert existing EDI suppliers to SAP Ariba solutions, as fully integrated

20. SAP Ariba solutions have delivered benefits to both DuluxGroup and its supplier
network, and enabled purchasing to keep up with advancements in manufacturing
Benefits to DuluxGroup:
• Reduced error rate and efficiency gains both within A/P and at the sites through eliminating manual processing
• Ability to manage different types of orders and ordering behaviour (e.g. we have a specific type of order for materials with fuel excise)
• Potential to expand use of SAP Ariba solutions into indirects purchasing and upstream procurement management, as well as more
advanced direct materials supply management (e.g. live forecasting). Assists in bringing procurement and supply chain closer together
Benefits to Suppliers:
• Improved visibility into the relationship with DuluxGroup – reduced need to follow up on deliveries, payment status, etc
• Ability to select level of engagement with SAP Ariba solutions, with options to integrate or follow a cost-free option (Light Account)
• Potential to gain access to other customers on the network
Alignment with Manufacturing:
• DuluxGroup is making substantial investments in its manufacturing network, moving to automate manufacturing processes and
remain a best-in-class producer
• Paper-based purchasing is a relic of a bygone era and has no place in a world-class manufacturing facility – SAP Ariba solutions have
allowed DuluxGroup to ensure that this is the case from day 1 at its new paints factory, and will soon be the case across the network

21. Questions?

22. 22INTERNAL© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ 22INTERNAL© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Point-to-point EDI
Portals and
single process solutions
Supplier collaboration challenges
Wasted time and resources and
maverick spending
Limited visibility into supplier
behaviors and capabilities
Inefficiencies can cost companies >$650 billion annually
Suppliers
Buyer
Manual paper-based
collaboration

23. 23PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
SAP Ariba Supply Chain Collaboration for Buyers
Extends your supply chain planning and execution solutions to enable collaboration with your
trading partners
 Gain early visibility into potential supply disruptions
 Reduce inflexible point-to-point solutions and manual portals
 Benefit from better integration and comprehensive road map
Supplier’s
internal processes
Buyer’s
internal processes
Direct collaborative processes with
SAP Ariba Supply Chain Collaboration
for Buyers

24. 24PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Buyer Supplier or contract
manufacturer
Purchase or subcontract order
Component receipt notice
PO confirmation
Component consumption
Self-billing or ERS** invoice
Component ship notice
Invoice
Forecast commitForecast or demand plan
Quality notification or response Quality deviation request or response
Payment
Buyer Supplier
SMI* schedule agreement
Planned replenishment notification
Demand, inventory, and min/max info
SAP Ariba Supply Chain Collaboration for Buyers
* Supplier managed inventory
** Evaluated receipt settlement

25. 25PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
Additional discrete and process manufacturers and retailers adopting
$3 billion retailer
Get more inventory visibility to
sustain aggressive growth and
expansion
$40 billion life
sciences brand owner
Obtain early visibility into batch
quality and improve inventory
management
$90 billion high-tech
device manufacturer
Evolve from a forecast-and-
allocation-driven model to a
demand-driven fulfillment (pull)
model to provide guaranteed
availability of end product
Customer Objectives
SAP Ariba Supply Chain Collaboration for
Buyers for order, delivery, and invoice
collaboration with all direct (merchandise)
vendors
Solution
SAP Ariba Supply Chain Collaboration for Buyers
for forecast, order, quality, and invoice
collaboration with contract manufacturers and
direct suppliers
SAP Ariba Supply Chain Collaboration for Buyers
for forecast planning and execution collaboration
with contract manufacturers and suppliers:
 $300 million inventory reduction
 $15 million savings in cost of goods sold
 85% faster supplier onboarding

26. 26PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Public
SAP Ariba Live, Sydney
Wednesday, 23 AugustTuesday, 22 August
11:30: Extending supply chain systems from SAP to
your suppliers with SAP Ariba Solutions for Direct
Spend (SID 51376)
2:45: Recent innovations in SAP Ariba Supply Chain
solutions (SID 51393)
9:00: Staples Australia and New Zealand:
collaborating with direct spend suppliers
(SID 51252)
1:45: Ask the SAP Ariba product leadership
team (SID 51370)
1:45: DuluxGroup’s paperless supply chain
collaboration spend (SID 51254)
10:00: Discovering SAP Ariba Solutions for
Direct Spend with SAP Ariba’s product and
innovations leadership team (SID 51392)
3:45: Rio Tinto: sourcing multiple spend
categories in a single platform (SID 51255)
11:00: Innovations in direct spend sourcing:
managing direct spend sourcing and supplier
management in the cloud (SID 51274)
Direct spend
customer
OR
2:45: Recent innovations in supplier management (SID
51390)
Direct spend
customer
12:15: Direct spend luncheon (invitation only)
3:00: Enable end-to-end product specification,
sourcing, and execution processes to drive savings
(SID 51511)
1:30: Manage your supply chain by exception
(SID 51512)
12:30: Source all materials and services from
a multilevel BOM (SID 51513)
Direct spend
customer

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28. Thank you.
Contact information:
Leah Knight
leah.knight@sap.com