SAP Charts New Frontiers in Transportation Management

SAP’s Transportation Management Applications to Help Companies React Profitably to Change Across Global Supply Chain Networks Through Adaptive and Automated Processes

BERLIN, Germany - October 19, 2005 - SAP AG (NYSE: SAP) today announced it is gearing its comprehensive transportation management applications to help companies further optimize revenue across the operations that currently account for up to 60 percent of overall logistics spending. Building on its best-in-class supply chain applications and road map for adaptive business networks, SAP is embedding its existing transportation software with new capabilities enabling companies to sense and respond quickly and profitably to the fast pace of change in today’s competitive transportation environment. The announcement was made at the BVL German Logistics Conference, being held in Berlin, Germany, October 19-21.

In an increasingly complex global transportation landscape, there is less margin for error; the ability to work efficiently with network partners, make profitable and timely decisions and meet customer demands has never been more crucial. Once marked by linear routing from manufacturer to customer, transportation is now a service distributed across a widespread global network of partners and logistics service providers (LSPs). Customers move goods to numerous destinations via multiple modes (air, sea, road, and rail) and require on-time delivery faster than ever: consumer goods makers, for example, have reduced order-to-delivery cycles by 50 percent, now averaging 3.6 days compared to 7.8 days in 19991. These same customers are demanding the accelerated service at the same or reduced cost.

“Globalization, outsourcing and shrinking cycle times are adding risk, cost and complexity to transportation operations,” said Adrian Gonzalez, director, Logistic Executive Council, ARC Advisory Group. “Companies must recognize that transportation management does not exist in a vacuum; it’s a process that interfaces with a variety of other business functions, including order management, purchasing, warehouse management, customer service and financials. Companies that take an end-to-end, process-centric perspective will achieve greater financial and operational success.”

Full Force of SAP Software for Transportation Transformation
By adding more business process flexibility into its software, SAP will turn the core dilemma of transportation into competitive advantage: companies will be able to meet the unique delivery requirements of individual customers on time while still achieving cost efficiency. Business processes across the entire enterprise and extended transportation network will be connected, making exceptions easier to handle for companies and their partners. For example, transportation managers will be able to perform continuous route optimization based on real-time events. Real-time visibility across the extended supply chain will help managers reduce “firefighting” and the creeping cost of “maverick spending,” better identify revenue opportunities and improve asset utilization. Embedded analytics will help managers increase profitability by calculating the net gains during the entire process from bidding to delivery.

“SAP is the only vendor that can provide a connected transportation solution and vision that integrates logistics, financial and information network elements to enable profitable logistics decisions and execution to support an adaptive supply chain network,” said Jim Hagemann Snabe, general manager, Industry Solutions, SAP AG. “Building on our best-in-class applications, we are designing a service-enabled transportation solution that integrates end-to-end business processes spanning enterprise and network boundaries. With SAP, companies today are already gearing up to create the adaptive processes of network-centric transportation that define supply chain superiority.”

SAP’s existing transportation management software is used today by more than 2,200 companies. Major transportation management extensions such as order split and merge, routing guide and one-time ship will be available in the next version of mySAP™ Supply Chain Management (mySAP SCM), scheduled for December 2005. Additional transportation management capabilities are planned to be available for first customers in 2006, with further functionality to follow in 2007. The capabilities will also enhance the recently launched industry solution portfolio, SAP for Logistics Service Providers.

1 “The GMA 2005 Logistics Survey,” IBM Business Consulting Services, June 2005

About mySAP™ Supply Chain Management (mySAP SCM)
mySAP™ Supply Chain Management (mySAP SCM) helps companies align supply and demand to keep goods flowing smoothly and profitably. Powered by the SAP NetWeaver® platform and leveraging emerging technologies and “real world aware” practices—using technologies such as radio frequency identification (RFID) tags, smart cards and sensors—mySAP SCM transforms traditional supply chains from linear, sequential steps into adaptive supply chain networks in which communities of customer-focused companies share knowledge and resources to adjust intelligently and profitably to changing market conditions. mySAP SCM offers tailored solutions for industries including automotive, chemical, consumer packaged goods, high tech, logistics service providers, mill products, oil and gas and pharmaceutical. (Additional information at http://www.sap.com/scm)

About SAP for Logistics Service Providers
SAP for Logistics Service Providers is designed to meet logistics service companies’ demands for efficient supply chain and cross-border trade procedures, close collaboration with customers and partners and enhanced service delivery. With more than 260 customers worldwide, the solution portfolio offers targeted support for all aspects of logistics operations and enables logistics companies to provide tailored service to each customer across multiple industries. (Additional information at http://www.sap.com/industries/logisticservices)

About SAP
SAP is the world’s leading provider of business software solutions*. Today, more than 28,200 customers in over 120 countries run more than 96,400 installations of SAP® software—from distinct solutions addressing the needs of small and midsize enterprises to suite solutions for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, mySAP™ Business Suite solutions are helping enterprises around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industry segments, including high tech, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com)

(*) SAP defines business software solutions as comprising enterprise resource planning and related software solutions such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Copyright © 2005 SAP AG. All rights reserved.
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.

Contact Information

Jason Loesche

Press Contact

SAP AG

Contact via E-mail