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.
Deployment of smarter commerce concepts in B2B electronics environments
1. 1
BI-329 – Smarter Commerce
in B2B Electronics:
Transforming Sales and Service
to Increase Revenue and
Customer Loyalty
Thorsten Schröer, IBM
Werner Bueker, SMA Solar
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 &
Automation
Equipment
Office
Equipment
4. 4
Power & 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 >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 & Automation Equipment Industry.
5. From Product to
Services
Software
Analytics
Integration
Marketing
Program & project management
End-to-end outsourcing
Usage-based pricing
Control & management systems
Smart device capability
Capturing data from sensors
Creating insight & 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.
7. 7
Smarter Commerce solutions addresses key
challenges of Power & Automation Equipment
manufacturers
MarketBuy
Service Sell
Customer
• Engineering Outsourcing
• Revenue and margin
generation via service
transformation
• Supply chain planning
(S&OP)
• Supply Chain network and
inventory optimization
• Supply Chain Visibility
• B2B integration
• Procurement
Transformation
• Customer Awareness &
Analytics
• Digital Marketing
Optimization
• Cross-division selling
• Order Management &
Fulfillment
• BtB shop solutions
• Payments & Settlements
Enterprise Sellers believe change is coming for B2B…but not yet,
and not quickly…..but it will come faster and bigger then they think.
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
DC’s
• 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.
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 < 1 year
• Distribution network
optimization provides further
opportunities
1
2
3
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
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
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 management’s 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.
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)
> In Germany, in the past 10
years alone, the costs of
generating solar power have
dropped by over 60%.
> Solar power is already more
cost-efficient than conventional
household electricity.
> 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
16. SMA Solar Technology AG
SMA is the global market
and technology leader for
solar inverters:
> Comprehensive product
range
> Global presence
> Flexible production
> Service excellence
> Innovative strength
> 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
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
18. SMA Solar Technology AG
SMA has a defined roadmap to reduce the specific costs
of inverters
18
> Analysis of those components
that represent 80% of the
material costs
> Change of assembly and testing
processes
> Increase the speed of switching
and thus reduce the size of
windings
> Highly integrated
microelectronics
> 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 & development focus
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
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
20. SMA Solar Technology AG
Professional sourcing
20
SMA only produces to order
> Weekly forecast meetings
> Global sourcing
> 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%
> Low capital intensity
> Outsourcing
> Temporary
employees
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
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 material requirements from
customer to supplier through integrated IT systems
Lean logistics (e.g., minimum handling, short distances, flow principle,
synchronization)
Components of the SMA logistics strategy
Suppliers Production Customers
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
21
22. SMA Solar Technology AG
Order and Product Workflow
22EPC = Engineering-Procurement-Production, SPC = Sunny Pro Club
Final User
SMA production
EDI
Order
Manageme
nt
OrderWholesalers/EPC
SAP
ERP /
CRM
OOC - Websphere
Commerce
fax / phone
Sunny Pro Club - Websphere
Commerce
Installer
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
23. SMA Solar Technology AG
Target Markets
23Source: SMA Order Processing und SPC ;
MPS = Medium Power Solutions, OGS = Off-Grid Solutions, SPC = Sunny
Pro Club
Asia
America
Europe
Australia
America
> Wholesalers/EPC MPS/OGS
> Installer (SPC)
Europe
> Wholesalers/EPC MPS/OGS
> Installer (SPC)
Asia
> Wholesalers/EPC MPS/OGS
Australia
> Wholesalers/EPC MPS/OGS
Sunny Pro Club Members
(Installer)
Wholesaler/EP
C
Africa
Africa
> Wholesalers/EPC MPS/OGS
> Installer (SPC)
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
24. SMA Solar Technology AG
Milestones
24
Start
Mo 06.12.10
End
Di 11.12.12
January April July January May July October
Planning finished
Mi 16.02.11
OOC-I Intersolar
Mi 08.06.11
OOC-I (R1.1)
Do 14.07.11
OOC-I (R1.2)
Fr 07.10.11
OOC (R2.0 Beta)
Di 01.05.12
OOC (R2.0) Intersolar
Mi 12.06.12
OOC (R2.1)
Mo 23.07.12
OOC (R3.0) MPS USA
Di 27.11.12
Today
> November 2010: Project idea: a call from a board member
> December 2010: Pre-Project Start
> February 2011: Pre-Project Decision for IBM WebSphere Commerce
> February 2011: Project Start with Scrum
> June 2011: Presentation Online Order Center at Intersolar 2011 as a Information
portal
> July 2011: Go Live for registered Customer
> October 2011: New Features and Languages
> May 2012: R2 beta Shop for SMA-Subsidiaries (incl. orders from sold to)
> June 2012: R2 Shop for Wholesalers MPS, OGS, Subsidiaries RoW (without
USA)
> From July 2012: Start Subproject for USA, enhance functionality (document
management, payment)
MPS = Medium Power Solutions, OGS = Off-Grid Solutions, SPC =
Sunny Pro Club
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
25. SMA Solar Technology AG
Project Start
Classic Project Approach
25
Database LayerDatabase Layer
Application LayerApplication Layer
Presentation LayerPresentation Layer
ProjectTimeLineProjectTimeLine
SMA internal
Customer review
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
26. SMA Solar Technology AG
SCRUM – agile project realization
26
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
28. SMA Solar Technology AG
Summary
28
S T R E N G T H S
> SMA : Where you have an B2B and B2C business
> SMA : Process automation
> Customer : Better visibility of order history, tracking,
….
> Scrum : When you have to be flexible during the
project
> Scrum : Better teamspirit – higly motivated team
W E A K N E S S E S
> Where Websphere Commerce ist not the leading
system
> SMA : Well supported customer
> SMA : Element of the logistic strategy
> Customer : Processintegration
> Scrum : When integrate and trust the SCRUM-Team
> Scrum : Better stakeholder feedback / interaction
> SMA : Integrate the project into an e-business
strategy
> SMA : Integrate the Order Processing and Logistic
Team
> SMA : Complex technical enviroment
> Customer : Security issues (2 Factor)
> Scrum: Missing understanding of agility in adjected
groups
O P P O R T U N I T I E S T H R E A T S
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
31. SMA Solar Technology AG
Project outlook according to Gartner Hype Cycle
31
1. Renewable Energies | 2. Company Story | 3. Technology | 4. Markets | 5. Logistics strategy | 6. E-commerce project | 7. Summary
35. Join us in the Demo Zone at 18:30 on Tuesday to meet our
industry GM and other electronics execs
Ask Thorsten after the session if you would like to see a
demonstration of Smarter Commerce in action for
Electronics
Find out more…