RWE Power PAGE 1

RWE as Shipper –

Automated Transportation Planning with SAP-TM

13/10/2015

RWE Power PAGE 2

Upgrading

plants

13/10/2015

100%*

Solid fuel

sales

* 100% RWE Power

RWE Power

Conventional

Power

Generation

RWE

Generation

Supply /

Distribution

Networks

Germany

RWE

Deutschland

Supply

Netherlands /

Belgium

Essent

Supply

United Kingdom

RWE npower

Central Eastern

and South

Eastern Europe

RWE East

Renewables

RWE Innogy

Trading /

Gas Midstream

RWE Supply

& Trading

Upgrading

Group

Rheinbraun

Brennstoff

GmbH

RSB

Logistik

GmbH

Solid fuel

distribution

Solid fuel

production

Large-scale power plants80.4mt

Sale

s (R

BB)Pro

du

ctio

n

9.5mt Upgrading products

Electricity by RWE Power generation

Dis

trib

uti

on

(R

SB)

Employees: 1,654Fiscal year 2014

Power plants of Upgrading operations

2.47TWh

Solid fuel market

Private customers 0.9mt

Industrial

customers 6.4mt

Σ 7.3mt

3.7mt Electricity by Upgrading

2.3mt Non-lignite products

Upgrading

RWE Power PAGE 3

Final product

* incl. direct sales

Upgrading products 2014

13,2*

raw

lignite5,05

dry

lignite

2,47electricity

3,248pulverized

in mt / twh - fiscal year 2014

1,021

compact

0,247

grained

0,175

activated

coke

ProcessingRawlignite

RWE Power PAGE 4

Why do we need SAP TM for our lignite trucks?

13/10/2015

deliveries per disponent

‘in 1000freight cost development Germany

‘per to/pal

e2015201420132012

Packed goods

Bulk goods

disposition and logistics staff

‘in FTE

Freight Settlement

Freight Purchasing

Disposition

Total

11

28

414

34

103734 810

20162015201420132012

1914

4

1619 1820

35

deliveries per year

‘in 1000total

road

rail

232237

5

258263 227

5

222

55

227232258

253

5

20162015201420132012

15,3

14,2

15,0

11,7 14,2

37,533,0

14,211,4

14,7

20162015201420132012

unplanned

planned

RWE Power PAGE 5

193.000 deliveries within Germany in 201444.000 deliveries cross-border

13/10/2015

Deliveries from Rhenisch area to customersDeliveries from RBB

profit center to profit centerDeliveries to foreign countries

RWE Power PAGE 6

Inbound, outbound and in-between: Multiple scenarios add to complexity

13/10/2015

Warehouse fitting4

Third-party order5

Inbound purchase order6

plant 1

1

13

5

2

2

6

Unplanned customer order1

Planned customer order2

Stock transfer3

plant N

warehouse A warehouse B

Supplier Customer

RWE POWER

RBB

4

1

23

4

5

6

RWE Power PAGE 7

Implementing SAP-TM: The Challenge

13/10/2015

high-performance shipping

• Around 240.000 deliveries per year

• Truck load every 7.5 minutes

transport disposition

�

settlement

�

� � � �streamline

the process ̶

but don‘t touch shipping

RWE Power PAGE 8

Project Phase I: Freight Cost Management and Freight Settlement

13/10/2015

Sales Order

Freight

Agreement

Goods Issue

Freight

Settlement Doc.

Billing Document Transp. Service

Purchase Order

Service Entry Sh.

ERS Invoice Debit Note

Delivery Note

Tra

nsp

ort

Pla

nn

ing

an

d D

isp

osit

ion

Tra

nsp

ort

Execu

tio

nan

d S

ett

lem

en

t

SAP ERP SAP TM

Freight Order

Agency Billing Doc

Delivery based

Transp. Request

Shipping

Instructions

Service Provider

Logistic

RWE Power PAGE 9

Project Phase II: Order Integration, Planning and Carrier Selection

13/10/2015

Sales Order

Freight

Agreement

Freight UnitOrder based

Transp. Request

Goods Issue

Shipping

Instructions

Freight Order

Freight Order

PlanningConsolidationCarrier Sel.

Delivery Note

Tra

nsp

ort

Pla

nn

ing

an

d D

isp

osit

ion

Tra

nsp

ort

Execu

tio

nan

d S

ett

lem

en

t

SAP ERP SAP TM

Billing Document Freight

Settlement Doc.

Transp. Service

Purchase Order

Service Entry Sh.

ERS Invoice Debit NoteAgency Billing Doc

Delivery based

Transp. Request

Service Provider

Logistic

RWE Power PAGE 10

Disposition: From single-object planning to monitoring

13/10/2015

Gut & Günstig Gmbh

Gut & Günstig Gmbh

Alles auf Lager KG

Handaufallee 17 / 21337 Lüneburg

Handaufallee 17 / 21337 Lüneburg

Eisenrampe 6 / 04668 Grimma

Completely automated processes supported by work lists�Exception alerts trigger planning validation by disposition�

RWE Power PAGE 11

Transporting bulk goods

13/10/2015

> Freight agreements based on TO

> Full truck loads

> Delivered quantity < > ordered quantity

as standard processing

> Invoicing based on carried weight

�Handling of residual order quantities as success factor

for qualified planning

RWE Power PAGE 12

Transporting palletized goods

13/10/2015

> Freight agreements based on PAL

featuring quantity dependent rebates

> Combined freight units

with several unloading points

> Delivered quantity < > ordered quantity

depending on gross weight

> Invoicing based on carried number of palettes

�The less complex the freight agreements – the easier the invoicing

RWE Power PAGE 13

Cost distribution: Yes, we can!

13/10/2015

Essential for our business

Outbound Freights:

Freight costs per material are involved in

the sales price calculation procedure.

Inbound Freights:

Legal requirement – inbound freight

costs per material need to be considered

within stock valuation as incidental

acquisition expenses.

RWE Power PAGE 14

Conquering the Agency Business

Current Assets

Operating Expense

Cost distribution by agency billing document

> SAP ERP component to forward costs between partners

> Price calculation scheme used as mapping tool:

TM charge type � price condition type � G/L account

> Profound knowledge required: price & account determination,

BAdI implementation in FSD inbound and agency billing

Weight /

Palettes

RWE Power PAGE 15

Major project milestones: 2012-2016

13/10/2015

DINAS migration planned

• Higher degree of automation for planning required

• Data integration outdated, manual interfaces block flexibility

Decision LES vs. TM

• Process Mapping

• Decision LES vs. TM � TM 8.0 gives new impulse towards TM

• Hardware sizing

• GOPA/ Novigo on board

Phase 1 –Analysis

• Migration and integration concept

• Scenario definition

Phase 2 -freight settlement

• Focus on master data management and cost distribution

• Detailed planning of migration: When do we switch? Which orders in old/new system?

Phase 3 -planning (DE)

• Road only

• 6 planning scenarios

Planning BE/FR

• Add foreign country processes

• Use synergies

Go live rail

• Freight settlement only

• No planning

further integration

• Strategic freight management

• Move to 9.3

• …?

2015 20162012 2013 2014

RWE Power PAGE 16

Business functions and interfaces: Major pitfalls to avoid

13/10/2015

Overall project expenses

‘in percentStandard processes are easily installed

Major issues:

- Third party order

- Vendor consignment

Both not part of TM 9.0

� check your specialty processes in advance!

Individual processes are expensive

Major issues:

- Individual transactions, e.g. shipping system

- Correction tool

- Required service pack & business functions in ERP system

Both not part of TM 9.0

� Be thorough in analysis of AS IS situation

� Plan (far!) ahead for required changes in the ERP system

20%

TM

customizing

80%

Integration of

existing processes

in existing environment

RWE Power PAGE 17

Best practices in a difficult project environment

13/10/2015

Project benefits

gained (+) / lost (-)

Manual

interfaces

removed

Automated

corrections

Automated

freight

settlement

Automated

planning

Freight

agreements

Server

+

-

Automation works!

80% automated planning in disposition

95% automated freight settlement & corrections

...and needs powerful hardware!

Keep freight agreements simple!