SAP Innovation Awards Entry Pitch Deck

PUBLIC

SAP Innovation Awards 2023

Entry Pitch Deck

World-Class Scan-Based Trading Solution

Walgreens Boots Alliance

Company Information

Headquarters

Industry

Web Site

Company Name

No of Employees

Deerfield. IL

325,000

https://www.walgreensbootsalliance.com/

Our segment operates 8,886* drugstores in 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. About 78 percent

of the U.S. population lives within five miles of a Walgreens or Duane Reade pharmacy.

We sell prescription and non-prescription drugs, as well as a wide assortment of retail products, including health and wellness, beauty,

personal care and consumables and general merchandise. We filled approximately 819.6 million prescriptions in fiscal 2022, including

immunizations.

We are also focused on creating neighborhood health destinations within our stores, and a more modern pharmacy aligned to providing a

wider range of healthcare services. Across the U.S., we have more than 85,000 healthcare service providers, including pharmacists,

pharmacy technicians, nurse practitioners and other health-related professionals. Through them, in addition to our focus on providing high-

quality, personalized patient care, we also expect to continue to play a growing role in government and employer efforts to control

escalating healthcare costs.

We’ve taken further steps to develop these neighborhood health destinations, working with our strategic partners such as VillageMD to

provide an integrated primary care and pharmacy model that aims to drive better health outcomes, reduce costs and provide a

differentiated patient experience.

Walgreens Boots Alliance

Retailer

Challenge Solution Outcome

Self contained end to end solution all performed DAILY

inside of SAP. No Human Intervention required

❖ Point of Sale to SAP Car at UPC Article Level

❖ SAP CAR integration to SAP 2020

❖ Sales Recognized

❖ Cost of Good Sold Recognized

❖ Liability Recorded in SAP MRKO Account

❖ SAP MRKO creates Vendor Invoices Daily

❖ SAP 2020 send Invoice Payment Info to SAP Car

❖ SAP CAR creates EDI 852 with

UPC/Article/Invoice

❖ SAP Supplier Portal Updated with all information

❖ Enables Diversity Suppliers to participate in

Walgreens SBT Program who lack EDI

capabilities by using portal

❖ Performance 3 hours daily vs Weekly

❖ .05% Error rate vs 11%

In addition to benefiting from consistently on-time,

accurate payments, Walgreens vendors have also

gained timely, actionable visibility into what is

selling in each store. Because of this view, vendors

are benefiting from:

❖ Ability to perform daily operational analysis of UPC Sold and

to plan next deliveries at store level

❖ Ability to perform accurate forecasting of product production

❖ Ability to eliminate in-store scouting of inventory prior to

delivery

❖ Daily ability to see store Inventory turn and use shelf space

more efficiently

❖ Elimination of Vendor back office personnel to reconcile the

EDI 852 to the Invoice

Legacy Walgreens was running Scan-Based Trading

(SBT) invoice creation on a mainframe, outside of SAP

causing an 11% invoice error rate in billings.

These invoice issues created significant operational

and back office issues for both Walgreens and our SBT

Vendors.

❖ Vender Back Office Reconciling Invoices to EDI 852

❖ Vender Operations reliability of Walgreens EDI 852 to

plan deliveries and production

❖ Walgreens Call Center volume increases to resolve 11%

error rate

❖ Walgreens over pays or under pays it venders due to

invoice errors

Walgreens Boots Alliance

11%

Items invoiced on

peak days

2.3M

Hours needed to run

invoices on peak

days

2-3

Brick Two - Scan-Based Trading Solution

Decrease in

invoicing errors

Walgreens is a world-class organization, we needed a world-class

scan based trading program that meets our diversity goals and our

venders needs. The Scan-Based Trading (SBT) solution needed to

provide our vendors daily the information they need to run their

business to keep Walgreens shelves stocked for our customers.

That objective was met with the tools and environments delivered by

SAP MaxAttention.

Bradley J. Trychta, Senior Director Enterprise Financial Services

Walgreens Boots Alliance

“

”

Challenges and Objectives 1 of 2

Business Challenges

Global Challenges

Walgreens was facing the challenge of delivering on-time,

consistently accurate invoices to our Scan-Based Trading

vendors. Issues were being caused by the fact that Point-of-

Sale (POS) data used for generating invoices needed to be

transported out of SAP to a Legacy process that was running

in a mainframe environment.

This transfer required multiple steps through distinct

interfaces, which was causing data inaccuracies. Fixing the

results of these inaccuracies was requiring daily extra steps

by both Walgreens and vendor employees. Vendors were not

receiving information at the high level that Walgreens is

committed to providing.

The Walgreens SBT environment, as now configured, makes

it a lot easier for Walgreens to meet and/or exceed

participation in the Supply Chain offerings by Diversity

businesses.

Why SAP

Project Objectives

Challenges and Objectives 2 of 2

SAP provided the environment, the tools, and the expertise

needed for implementing a new invoice creation process that met

our goal of providing an improved flow of data to our Scan-Based

Trading vendors.

In order to eliminate the inaccuracies that were inherent in the non-

SAP Legacy workflow, and to provide a daily record of sales

activity to SBT vendors, Walgreens needed to migrate SBT invoice

creation over to SAP.

One of the biggest challenges in this move and therefore a key

objective was to differentiate SBT merchandise invoicing from

Walgreens Owned merchandise invoicing, which was already

running in SAP.

Tight controls would be needed to maintain this distinction and

prevent inadvertent payments to vendors.

Project or Use Case Details

Process After

Process Before

An impending elimination of the mainframe environment in which the Legacy SBT invoice creation was running precipitated the need for an

overhaul of the process. Driving the discussion regarding the direction to take was the high percentage of errors that were being

experienced in Legacy caused by need to transfer sales activity data out of SAP to Legacy. These errors ran as high as 10%, causing

incorrect payments of $117,000,000 over 3 months.

By migrating SBT invoice creation into the SAP environment and across multiple SAP applications, the error rate has dropped to

essentially zero on most days. At most, the error rate is one half of 1 percent of all invoices. On peak days, SAP enables Walgreens to

handle 1.2 million SBT transactions, which represents 2.3 million items sold. Most significantly, the processing of this volume requires only

2 to 3 hours and causes no discernable impact to other concurrent SAP processes.

In the new process being run in SAP, the cost-of- goods is

captured the same way, however, the path is now shorter with less

translations of the data:

POS -- CAR -- SAP -- CAR

Via a daily MRKO process, the cost-of-goods is converted to

article-level invoices that are created on behalf of the vendors. At

the completion of this process, a control report is generated to

ensure that all invoiced transactions were successfully copied to

the SAP Customer Activity Repository (CAR) environment, which

is the signal needed for the CAR to generate the UPC-level data

files for transmission to the vendors.

In the Scan-Based Trading process, the cost-of-goods to a vendor

is recorded when an item is scanned at the register. In the old

Legacy process, this point-of-sale (POS) data was transmitted

from SAP to Legacy and then back to SAP via a multi-step path:

POS -- SAP -- CAR -- BW -- MSSDW – Mainframe -- Oracle -- SAP

Once in Legacy, the data was used to generate invoices on behalf

of the vendors. Inherent in this multi-step hand off was the

potential and indeed reality of dropped or degraded data that

resulted in the creation of inaccurate invoices.

* IT benefits are required if you are using SAP Business Technology Platform products

Benefits and Outcomes 1 of 2

IT*

Business or Social

With the new SAP-based, SBT invoice creation process,

Walgreens was able to decrease invoice errors by 11%, while

moving to a daily delivery of invoices for all vendors, who can

leverage the invoice data. Not only are these vendors receiving

accurate, on-time payments, they benefit from actionable

information that allows them to:

❖ Maximize stock in individual stores

❖ Better forecast product production

❖ Minimize in-store scouting of inventory

❖ Eliminate an invoicing person

The improved process enabled Walgreens to:

• Migrate from the mainframe Legacy systems and use all SAP

systems for processing

• Add control tables to ensure only consignment inventory is

self-invoiced

• Enhance RKWA table to better enable UPC reporting

• Add SAP Fiori Tile for vendor self-service reporting on multiple

levels of SBT data

Benefits and Outcomes 2 of 2

People Related – Personal Perspective

The positive effects of this project for Walgreens is that all the

information is in SAP at item level.

This gives ever store the opportunity to put more focus on its own

planogram to see how each and every article is doing in their

store, region and area.

It enables operational excellence around actual shrink, loss and

donations at the article level.

Without this tool Walgreens does not have the ability to correct

GRIR errors at the article level so operational reporting is not

accurate but our financials our.

Architecture

SAP S/4HANA

SAP Fiori Portal

SAP

technologies used:

Date

Number of end usersDeployment status

Transaction Volume

Deployment Details 1 of 3

SAP product

Deployment status

LIVE / POC

Contribution to project

SAP S/4HANA

Live

RISE with SAP S/4HANA

Inventory Management

Finance and Management Accounting

SAP Materials Management

(MM)

Live

SAP MM (Materials Management) as part of SAP ERP software is used for Procurement

Handling and Inventory Management. When materials are required for processing, the

user(s) withdraws the material from the warehouse and a liability is created for the vendor

which is settled through a special payment process (i.e., MRKO transaction).

SAP Fiori

Live

SAP Fiori tile for vendor self

-service reporting on multiple levels of SBT data

SAP

Customer Activity

Repository (

CAR)

Live

Near Real-time sales analytics – POS sales and Sales from other channels

Inventory visibility – current inventory position (processed + unprocessed sales)

Cross company stock in transit

SAP Vendor Invoice

Management

Live

utomation of invoice processing, routing of invoice exceptions and workflows

12 Month Rollout ending November 2022

ConfidentialLive

2.3 million items invoiced per day

Deployment Details 2 of 3

Monetized (sold to your customers)

Listed on SAP Store

Solution/App details developed on SAP BTP

Co-innovation with SAP

Number of customers using the solution/app

The following SAP Business Technology (BTP) Solutions are part of the project:

Technology SAP BTP Solution Contribution to project

Application Development

and Automation

Extended Planning and

Analysis

Data and Analytics

SAP HANA Cloud

Data Management

Integration

SAP Cloud integration is the core integration technology connecting SAP and non

-SAP solutions

App

-to-App and Data Integration

Intelligent Technologies

Document Extraction services

Document Automation

The following offerings from SAP Services and Support and other packages were

utilized during the implementation or deployment phase:

Contribution to the project

Other:

Embedded Launch Activities

RISE with SAP

SAP MaxAttention

™

SAP Preferred Success Managed Business Services

SAP ActiveAttention

™

SAP Preferred Care, on-premise Cloud Application Services

SAP Business Journeys SAP Enterprise Support Activation and Optimization Services

Project Success Partner Success

Learning Success

Deployment Details 3 of 3

Walgreens leverage the RISE with SAP methodology for this deployment. Walgreens uses MaxAttention as a safeguard to this and other

projects as a safeguard to ensure success.

Additional Information

Since implementation, the new SAP-based SBT invoice creation process has been providing daily, actionable sales data to Walgreens

vendors. This has created greater vendor satisfaction, which is a top goal for Walgreens.

This deployment also helps support the larger goal of transferring non-SBT vendors to the SBT model. This move not only benefits

vendors, it offers a cash-flow benefit to Walgreens, as well as a reduction in the store staffing required for scanning-in merchandise upon

delivery into the store, which has inherent potential for errors.

With SBT, tracking of merchandise happens upon point-of-sale scanning. From there, the invoicing process begins, now less complicated

and with significantly less errors because of the switch to SAP.