2. - 0 - Confidential CASE STUDY Part –1 PLANNING Part –2 MANAGING Part –3 ADAPTING Zesati Hiren Shah Hiren@zesati.com 650 954 7047 San Jose, CA 95134

3. - 1 - Confidential CASE STUDY – Part I PLANNING Background Company: PDA Manufacturer Description: Maker of Handhelds Note: This is a fictional case study for illustration purposes

4. - 2 - Confidential Case Study - Introduction Problem Description –PDA Manufacturer is evaluating different design options –Basic PDA –Basic PDA with cell phone –Basic PDA with cell phone and camera What product has the highest profit potential?

5. - 3 - Confidential Challenges / Pain Today What is the profit potential of each PDA design option? –Investment –Service Costs –Transformation Costs –Material Costs What is the best warranty contract to offer with this product that maximizes Palm’s profitability Are there any other tradeoffs that I can make?

6. - 4 - Confidential Cost of an Incorrect Decision Not building the optimal product Offering the wrong Warranty Options Incorrect Launch Date … … ->Lost revenue ->Higher Costs ->Lost Margins

7. - 5 - Confidential Systems Flow of Information Zesati PPMA SAP PLM SRM SAP ERP CRM Design Manufacturing Service In-house Logistics PPMA: Product Profitability Management and Analysis

8. - 6 - Confidential RESULTS OF THE ANALYSIS – Impacting Spend before the fact Decision made to go ahead with the PDA+HANDSET+CAMERA Informed Planning Decisions

9. - 7 - Confidential CASE STUDY – Part II MANAGING SPEND Background Company: PDA Manufacturer Description: Maker of Handhelds

10. - 8 - Confidential Zesati PPMA notifies the SAP PLM App Zesati PPMA SAP PLM SRM SAP ERP CRM Design Sourcing Manufacturing Service In-house Logistics 1.The SAP PLM System is notified to initiate the Design for the PDA+HANDSET+CAMERA PROCESS BUILDER

11. - 9 - Confidential Release of Procurement BOM to SRM Zesati PPMA SAP PLM SRM SAP ERP CRM In-house 1.The Procurement BOM is release to the SRM Application 2.SRM User is notified 3.SRM User initiates the Sourcing Process PROCESS BUILDER Release Note: PDA Manufacturer uses an EMS provider and may source on behalf of the EMS provider.

12. - 10 - Confidential Release of Manufacturing BOM to SAP ERP Zesati PPMA SAP PLM SRM SAP ERP CRM In-house 1.The Manufacturing BOM is released to the SAP ERP Application 2.SAP ERP User is notified PROCESS BUILDER Release

13. - 11 - Confidential Setting and meeting spend management targets Managing your plan Plan Vs. Actual Comparison

14. - 12 - Confidential Release of Manufacturing BOM to SAP ERP Zesati PPMA SAP PLM SRM SAP ERP CRM In-house 1.The Manufacturing BOM is released to the SAP ERP Application 2.SAP ERP User is notified Note: PDA Manufacturer uses an EMS provider for its manufacturing and the role of the SAP ERP system is To monitor the process. The process of managing the communication with the EMS provider is a template by itself PROCESS BUILDER Release

15. - 13 - Confidential Notification to In-house System (Logistics) Zesati PPMA SAP PLM SRM SAP ERP CRM In-house 1.Logistics System is notified to plan for stocking and delivery PROCESS BUILDER Release

16. - 14 - Confidential Zesati PPMA monitors Plan Vs. Actual Zesati PPMA SAP PLM SRM SAP ERP CRM In-house Managing your plan

17. - 15 - Confidential CASE STUDY – Part III ADAPTING SPEND PDA Manufacturer has recently introduced a new PDA 4 months back Projection are sales of 1,000,000 quantity over nine months However …

18. - 16 - Confidential Total: $9,900,000 1. Revenue did not meet projections

19. - 17 - Confidential 2. Total Costs higher due to unplanned service costs

20. - 18 - Confidential Total: $9,900,000 3. Actual Profitability is much lower

21. - 19 - Confidential 4. Inventory on Hand Total: $9,900,000 There is $9.9MM Inventory at the EMS provider spread across different components

22. - 20 - Confidential What should the OEM do 1.Reduce price to increase total revenue? 2.Switch to higher quality components ? 3.Phase out product and liquidate inventory? 4.Use excess inventory components for next PDA? 5.Delay the launch date of the next PDA? 6.What if ? 7.… When ? How ?

23. - 21 - Confidential Proactive Monitoring would detect in real- time a deviation from planned profitability Zesati PPMA SAP PLM SRM SAP ERP CRM Design Sourcing Manufacturing Service In-house Logistics With -Zesati, PDA Manufacturer would have detected the situation much earlier since Increase in service and warranty cost would be an indication of poor quality and hence predict a drop in sales

24. - 22 - Confidential Execution of the Remedial Action carried out via Zesati Zesati PPMA SAP PLM SRM SAP ERP CRM Design Sourcing Manufacturing Service In-house Logistics 1.Zesati provides the ability to do trade-off analysis such as : a.Impact on profitability if prices are dropped to exhaust the finished goods inventory b.Cost of liquidating current inventory c.Moving Up the launch date of the successor PDA d.… e.… Adapting to Market Conditions

25. - 23 - Confidential Plan Summary: Zesati Value Proposition 1.Making Informed Decision upfront by taking in to account all cost and revenue drivers to determine products with highest profit potential and NPV 2. Managing and monitoring the cost of the product over its entire lifecycle to meet the projections set in step 1. 3. Handling unplanned events and resolving crisis situations Mange Adapt

26. - 24 - Confidential Product Profitability Analysis Technology and Architecture

27. - 25 - Confidential Product Profitability Analysis – Technology Overview Zesati Repository J2EE Application Server EntSAP ERPrise Communication Tools Object and Process Modeling Framework Product Model Demand Model Mfg Logistics Model Sourcing Model Investment Model Service Model Product Financial Model Sources Simulated Profit/Loss Statement NPV of Simulated Product Profit Product Profit Sensitivity Product Profit Optimization Databases EntSAP ERPrise Applications Flat file formats

28. - 26 - Confidential Servlet Engine/App Server GUI Services (Web Browser) GUI Services (Web Browser) External Applications (SAP, Pro/INTRALINK) External Applications (SAP, Pro/INTRALINK) Process Template Designer Process Template Designer Product Structure Manager Product Structure Manager Zesati Visualization Zesati Visualization Administration Zesati Reporting Zesati Reporting ZSQL (JDBC) Relational Data Store (Oracle/SQL Server) Internationalization Process Execution Engine Process Execution Engine Zesati Repository (Document and Product Lifecycle Management) Zesati Repository (Document and Product Lifecycle Management) Zesati Integration Server Adapter Zesati Server (J2EE Application) Zesati Applications Architecture and Technology

29. - 27 - Confidential JSP’s/Applets GUI Services (Web Browser) GUI Services (Web Browser) External Applications (SAP, Pro/INTRALINK) External Applications (SAP, Pro/INTRALINK) Security Service Security Service File Access Service File Access Service Product Service Product Service Work Flow Service Work Flow Service Business Process Service Business Process Service ZSQL (JDBC) Relational Data Store (Oracle/SQL Server) Data Access Service Data Access Service Root Object Java UI Beans Zesati Server (J2EE Application) Zesati Service Modules Software Architecture User File Part Work Flow Process Group Business Objects Adapter Service Adapter Service Adapter

30. - 28 - Confidential Examples of Product Demand in Zesati Can be loaded from Excel

31. - 29 - Confidential Examples of the Investment Model in Zesati Can be loaded from Excel

32. - 30 - Confidential Examples of SAP PLM Data in Zesati Can be loaded from Excel

33. - 31 - Confidential Examples of SRM Data in Zesati

34. - 32 - Confidential Examples of SAP ERP (Manufacturing) Data in Zesati

35. - 33 - Confidential Examples of Customer Specific Data in Zesati

36. - 34 - Confidential Examples of CRM (Service) Data in Zesati