SAP for Retail

SAP Runs Real Time Retailing

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Agenda SAP Retail Customer Best Practices in Retail mySAP ERP SAP R/3 Enterprise for Retail Evolution SAP for Retail Development Projects Future Store Initiative Outlook SDP Fashion

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Agenda

SAP Retail Customer

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Retail Customers 2003 compared to Dec 2002 Retail Customers Worldwide 1.696 (1367)

Europe/Middle East/Africa Americas Asia Pacific

M C13 TOTAL EM EA AM ERICAS APA Customers 1.696 1.221 268 207 Installations 3.736 2.438 688 593

1.221 (1024) 268 (225) 207 (184)

Live Install. 1.468 1.003 208 256 Systems 7.427 5.018 1.351 1.058

Merchandise Management Customers**369 (269)

Europe/Middle East/Africa Americas Asia Pacific

222 (188) 100 (52) 47 (29)

*Source: ISP/CIS reporting, not incl. are the customer types SAP internal, -partner, -hardware partner and -logo partner. **Including Staffworks customers
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Strong customer base worldwide

Grocery Health & Beauty

Convenience

Postal Services/ Telco

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Strong customer base worldwide

Fashion General Merchandiser

Catalogue Mail Order/ Internet Selling

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Strong customer base worldwide

Misc. Speciality Misc. Speciality

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Strong customer base worldwide

DIY/ Home Improvement Wholesale/ Cash&Carry/ Franchise Business

Home Furnishings

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Go Lives 2003

Live with SAP Enterprise 4.7 Incl. Purchasing, Master Data, Logistics (incl. VMI)

Live with mySAP Retail Implementation time: 6 months

Upgrade to R/3 Enterprise Further GoLive with mySAP Retail in Italy, Roll-out to US in preparation Upgrade to SAP R/3 4.6C Project time 9 months Live with IS-Retail (3 pilot stores), FI/CO, Rel. 4.6c, 110 stores, 80,000 SKUs Live with mySAP Retail and Retail AFS, SD, MM, WM, QM, FI, CO, HR Live in 800 pilot stores (out of 15.000 stores/ partner agencies ). Project time: approx. 12 months
9

Live with SAP Retail Enterprise

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Go Live 2003
Moebel Pfister and Migros Aare upgrade to R/3 Enterprise

On September 1, 2003, Moebel Pfister, a leading furniture retailer, went live with SAP Enterprise. The customer has reported back a seamless project without any major project challenges. Moebel Pfisters operations were never impacted by the upgrade in any way. The fact that the project was completed six weeks ahead of schedule and 20% below budget while meeting all the project objectives was the icing on the cake. On October 12, Migros Aare, one of the ten cooperatives of the Migros GenossenschaftsBund, successfully went live with R/3 Enterprise (upgrade from 4.5B) for their "Fresh items/perishables platform" - dairy and agricultural products (vegetables, fruit and flowers) as well as meat. The scope included a total of 14,000 articles and 2,000 users. The project last just six months and despite challenges related to hardware replacement and the upgrade of the Oracle database as well as the operating system (Unix AIX), the project delivered tangible benefits: Generating the assortment list (HPR-Version) is now a matter of 30 minutes instead of 21 hours! The system is stable and the customer is happy. Planned next steps are the upgrade to R/3 Enterprise for the cooperatives Luzern and Zurich. After that, the bakery assortment will be included and the rollout of the fresh item/perishable assortment will continue to the French speaking region as well as to Migros' convenience stores.
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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SAP R/3 Enterprise 2.0 Ramp-up customers

Ramp-up has started in December for Enterprise Extension Set 2.0

SPAR Management AG, Switzerland Ramp-up has started last week for Enterprise Extension Set 2.0

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Agenda

Best Practices in Retail

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Segmentation of the Retail Industry

Best Practices Best Practices for for SAP for Retail SAP for Retail Standardization of Standardization of Retail Enterprises Retail Enterprises into four into four main segments main segments

Fashion Fashion

e.g. textiles, fashion, shoes

Hard Goods Hard Goods

e.g. do-it-yourself, electrical, toys, sport equipment e.g. supermarket, discount store, convenience store, hypermarket, cash&carry e.g. supplying wholesale, Internet, mail-order

Food Food

Preconfigured Preconfigured Systems Systems

Wholesale Wholesale

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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What are SAP Best Practices for Retail?

Traditional project

With SAP Best Practices

Enable fast and easy Enable fast and easy Working CRM prototype implementation of SAP for Retail implementation of SAP for Retail Demonstration of a solution that Demonstration of a solution that is easy to: is easy to: identify with implement adapt to specific requirements Get a living and fully documented Get a living and fully documented prototype within days that you prototype within days that you can rapidly turn into a productive can rapidly turn into a productive solution solution

Time and effort savings

Identification and anticipation of reusable business processes and project activities

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Agenda

mySAP ERP

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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What is mySAP ERP?

mySAP ERP is the successor ERP offering to SAP R/3 Enterprise Functionality-wise mySAP ERP:
Includes all the functionality of mySAP R/3 Enterprise Plus a large number of additional business processes (SAP SEM, ESS) Integrated and Personalized functionality (Business Information Warehouse reporting, role based)
R/3 R/3 Enterprise Enterprise

Technology-wise mySAP ERP:

Is built on SAP NetWeaver (From 2004) further integration with SAP NetWeaver (Enterprise Portal, Exchange Infrastructure and SAP BW)
mySAP ERP

SAP NetWeaver

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Retail-wise mySAP ERP

SAP R/3 Enterprise
The Retail Solution is included in SAP R/3 Enterprise, additional functionality has been developed in specific Retail Add-Ons (Enterprise Extension Set 1.10 and 2.0)

mySAP ERP 2004

The Retail Solution is included in mySAP ERP 2004, new functionality has been developed in specific Retail Add-On (SAP ECC Extension Set 5.00)

mySAP ERP 2005

The Retail Solution will be included in mySAP ERP 2005, new Retail functionality will be developed

General statement of direction

The core Retail functionality (merchandising solution) will remain part of ERP and will be further enhanced in the future (continuous improvement mainly) However, new Retail functionality will be developed also in other SAP components (SCM, MDM, CRM, etc.) and will be tightly integrated with ERP functionality
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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The Architecture of mySAP ERP

Application
mySAP ERP Edition 2004 mySAP ERP Edition 2003

Additional Components
Self-Service Procurement Internet Sales and more

Additional Components
Self Services Self-Service Procurement Internet Sales Strategic Enterprise Management and more

Composite Applications SAP ERP Central Component 5.0

Self Services Strategic Enterprise Management

SAP R/3 Enterprise SAP R/3

up to 4.6C

SAP R/3 Enterprise SAP Enterprise Extension Set SAP R/3 Enterprise Core
SAP NetWeaver Composite Application Framework
PEOPLE INTEGRATION Multi Channel Access Portal Collaboration

Application SAP Basis

SAP Enterprise Extension Set SAP R/3 Enterprise Core SAP Web Application Server

SAP ECC Extension Set

Switch Framework

SAP ECC Core

SAP NetWeaver 2004 Composite Application Framework

PEOPLE INTEGRATION Multi Channel Access Portal Collaboration

Life Cycle Mgmt

Life Cycle Mgmt

INFORMATION INTEGRATION Bus. Intelligence Knowledge Mgmt Master Data Mgmt PROCESS INTEGRATION Business Integration Process Mgmt Broker APPLICATION PLATFORM J2EE ABAP DB and OS Abstraction

INFORMATION INTEGRATION Bus. Intelligence Knowledge Mgmt Master Data Mgmt PROCESS INTEGRATION Business Integration Process Mgmt Broker APPLICATION PLATFORM J2EE ABAP DB and OS Abstraction

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Technology

18

Release Strategy SAP R/3 and mySAP ERP

mySAP ERP Edition 2004
Other components (e.g. Self Service Procurement) Available with mySAP contracts only (e.g. mySAP ERP or mySAP Business Suite) SAP ERP Central Component 5.0
SAP ECC Extension Set 5.00 SAP ECC Core 5.0

SAP NetWeaver04

mySAP ERP Edition 2003

Other components (e.g. Self Service Procurement) SAP R/3 Enterprise
SAP R/3 Enterprise Extension Set 2.00 SAP R/3 Enterprise Extension Set 1.10 SAP R/3 Enterprise Core 4.7

SAP NetWeaver03 Available with SAP R/3 contract

SAP R/3 Enterprise

SAP R/3 Enterprise Extension Set 2.00 SAP R/3 Enterprise Extension Set 1.10 SAP R/3 Enterprise Core 4.7

SAP R/3 4.6C

2002

2003

2004
19

2005

2006

2007

2008

2009

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

The Architecture of SAP R/3 Enterprise

SAP R/3 Enterprise SAP R/3 Enterprise Extension Set 1.10 + 2.00
Optional new functional enhancements
(SAP R/3 Enterprise Extension Sets)

With SAP R/3 Enterprise, SAP has introduced a new development strategy. Primary focus: making deployment of new functionality optional. Plus: stability of existing processes

SAP R/3 Enterprise Core 4.7

Tuned Core, optimized for Performance

(SAP R/3 Enterprise Core)

SAP Web AS 6.20 + 6.30

Technology & infrastructure enhancements

(SAP Web Application Server)

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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The Architecture of SAP ERP Central Component 5.0

SAP ERP Central Component 5.0
Optional new functional enhancements
(SAP ECC Extension Sets)

SAP ECC Extension Set 5.00

Ongoing consolidation of additional industry add-ons into Extension Set layer

Traditional functionality as part of the SAP ECC Core

(SAP ECC Core 5.0)

SAP ECC Core 5.0

Optional enhancements on user interface for SAP Enterprise Portal

Latest SAP Web AS synchronized with SAP NetWeaver 04

(SAP Web AS 6.40)

SAP BW 3.5* SAP ITS**

SAP Web AS 6.40

Integrated SAP BW 3.5 and Internet Transaction Server

SAP ERP Central Component makes use of SAP NetWeaver capabilities

(such as existing and new functionality with direct support of SAP Enterprise Portal, reporting through integrated SAP BW)
* SAP BW 3.5 can be optionally deployed within the same instance ** SAP ITS (Internet Transaction Server) will be partly integrated in SAP Web AS 6.40
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Agenda

SAP R/3 Enterprise in Retail

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Retailers Landscape

Strategic Planning

Procurement

SCM

BI

CRM

Operative planning Merchandise Management

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Consumer

Sales

Vendor

SAP Business Warehouse: Architecture

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Knowledge Discovery / Data Mining Customer Groups

Subgroups e.g. Bargain hunters Regular customers Strategic customers C A e.g. Beer and Tooth Paste bought together on Thursday evenings shopping Algorithms

Buying Patterns
Companion Sales When? What? How?

B Consumers ballot paper

Direct marketing Target group specific assortments Marketing controlling

POS data Consumer data

Promotion Planning Shelf optimization Assortment planning

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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BW Business Content for mySAP Retail Enterprise

Data Mining Integration Category Management Store Controlling Market Data RMA Integration Close the Loop MAP Integration Article Infosystem POS Data Management Campbell Integration Customer Relation

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Features of a flexible merchandise planning system I

Business Information Warehouse Document Management Complex Processes

Easy to use Multiple Key figures to plan

398 157 005

Different Currencies US $

SG $

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Features of a flexible merchandise planning system II

Planning versions Complex Hierarchies

B A
Value and unit planning

Flexible Input templates

Temporal dimensions
90 80 70 60 50 40 Jan Febr . Mrz Apr il

UM WE (UM-WE) / UM

1000 800 0,2

UMS 1000 2000 3000

WE 500 1400 2000

UMS-WE 500 600 1000

40 30 20 10 0
28

Plan

Ist

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Features of a flexible merchandise planning system III

Interfaces Authorizations

Workflow

Allocation table / Promotion

Store A Store A New Article

Special buy Special buy -20 % -20 %

Store B Store B

Article and Characteristic Planning

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Prepack Allocation Planning

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Store Management with Enterprise Portals

BW Reporting SAP Retail Store

Workflow

Internet

SAP R/3 Retail Mobile Data Capture

POS Third Party

SAP R/3 HR

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Retail portal content: BP for Retail Retail Buyers Business benefit:

Provides single interface for data and information retrieved from several systems to support the buying process in a Retail company. The application focus of the first version is on the daily/yearly negotiation with suppliers. Future development phases plan to cover promotion planning, assortment control and additional procurement processes. Also suppliers should be allowed to access their data from outside.

Users can:
Define myEntities (Vendor, Sites) Manage daily vendor contacts Monitor Out-of-Stock situations & back orders

Roles:
Retail Buyer Stock Planner

Content systems:
SAP R/3 & Business Information Warehouse
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Retail portal content: BP for Retail Store Manager Business benefit:

Provides single interface for data from several systems to support retail processes, personnel management, and store controlling

Users can:
Support in-store promotions Manage staff and staff schedules Support pricing tasks Support purchase order process Support goods receipt and controlling processes

Roles:
Store Manager

Content systems:
SAP R/3 Retail & Business Information Warehouse

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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SAP Retail Store - Architecture

IDoc/RFC

R/3 Enterprise

Dialog

Business Connector
XML

ITS
HTML

Business Connector
POSition
SAP-XML

SAP-XML

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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SAP Retail Store Application Structure

LoginScreen

Main Menu

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Example: POS Inbound / Store Replenishment

Runtime Test: Data Volumes: 10,000 articles, 1,000 stores, 10 DCs System: 16 CPU Database server + 6 application servers (8 CPUs each)

Step 1: POS Inbound (1) with 130 parallel processes

100 million line items POS sales data (100,000 IDocs, aggregation ratio 10%)*
Runtime ca. 18 min ( more than 330 million line items / h)
*) 100 Idoc/store with 1000 line items each

Step 2:

Replenishment Calculation with 130 parallel processes

Check 10,000 articles per store, results in requirements for 20% of all articles
Runtime ca. 30 minutes

Step 3:

Creation of Follow-On documents with 100 parallel processes

Create 1 million order pos + 1 million delivery pos + 1 million transfer order positons
Runtime ca. 58 minutes

Total Runtime: approx. 105 minutes

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Planning Workbench - Process overview

Forecast Replenishment

Automatic Load Building

Automatic Creation Purchase Order

Purchase Order Creation manually

Planning Workbench

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Merchandise Distribution

Synchronized procurement and issue achieved by means of a fixed assignment Planning, monitoring, and control of the accelerated processing methods (crossdocking, flow-through) in the distribution center on the basis of this assignment Two phases:
Planning
Push Pull Goods Issue Goods Receipt

Processing
Cross-Docking Flow-through

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Returns in Retailing
Mail order return Return to vendor Retail return

External vendor

Consumers (identifiable or nonidentifiable customers)

Store
Return to vendor Store return

Return from customer Distribution center Wholesale Customer

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Store and Assortment Management in SAP for Retail

Merchandise Category Soft Drinks
Cola, Sparkling Water etc. Time Period

Merchandise Category Soft Drinks

Cola, Sparkling Water etc. Time Period

Assortment
Local assortment

Assortment Beverages

Local assortment

Assortment Beverages

02 03

Reference Store for Assortment

Automatically generated
Optional

System Required

Optional

Store Store A B C D
39

Store

Store A

B C D

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

The Allocation Management Process

Head office Head office

Head office

plans plans Merchandise is procured and allocated

coordinates coordinates

monitors monitors

Vendor Vendor

Store Store Store Store Wholesale Store

Distribution center

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Allocation Strategies: e.g. Bottom-up Strategy (BW access) Example: I need to buy and allocate a basic article for three stores to support a 4 week merchandise roll-out. I expect the article will sell at about 110% the volume of a two week period (07/01/2003 07/14/2003) last year. I want to forecast the sales of this article leading up to the roll-out and subtract that quantity from the current stock level and open order quantities (by store). The stores must display a minimum of 100 pc at the beginning of the roll-out, but their maximum capacity is only 350 pc. Finally, I need to distribute the article to stores in multiples of 5 pc.

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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The Promotion Management Process

Promotion final processing

Promotion planning

Carrying out the promotion Promotion subsequent processing

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Mark-Down Planning End of Season Process

Planning of markdowns
Select articles and sites Article (also based on characteristic value) Price phases Sales prices Markdown in % Quantities (planned sales quantity, stock remaining at end of season, ...) Calculate margins

Rel. price 80%

100%

50%

30%

Time

Markdown rule

Price activation
Generate condition records Update calculation

Sale of articles
Feedback from POS

Adapt markdown planning (where necessary)

Move price phases Increase markdown in %
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Analysis of sales activity

Compare planned /actual sales Remaining stock Range of coverage
43

Agenda

Evolution SAP for Retail

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Evolution SAP for Retail from 1.2B to R/3 Enterprise 2.0

Retail 1.2B
SAP R/3 Enterprise 1.10
Open mySAP.com integration Web Application Server 6.20 BADI (Business Add-Inn) Business Configuration Sets HPR fully integrated HPR Assortment List Store and Assortment Mgmt. New Mass Maintenance Tool Style (Variant) Matrix MAP enhanced function Prepack Allocation Planning Store Manager Portal SAP Retail Store PDC XML SAP Retail Store POS XML Markdown Pl.-enhanced function Allocation - enhanced function Allocation Strategy Promotion - enhanced function Replenishment Workbench enhancements Multi-Step Replenishment AHD / PDF in Replenishment Planned Delivery Time Order Cancellation Space Management - enhanced function Layout Workbench Merchandise Distribution enhanced function Logistics Execution System enhanced function TRM in LES Perishables enhanced function Global Trade Retail Method of Accounting Consumer Decision Tree mySAP ERP SAP NetWeaver SAP MAP (SEM) SAP Forecasting & Replenishment SAP POS Data Management SAP Profit Center Analytics SAP Customer Loyalty Marketing Portal Retail Business Packages Future Store Initiative Overlapping Promotions Promotion Delivery Phases Family Pricing Retail Revenue Mgmt. Interface Cross-Docking (considering DC Stock at Delivery Creation) Cross-Docking (Automatic Handling of Structured Articles) Stock Transfer for Consignment Authorities for Layout Workbench Allocation based on Shelves Communication of Placement Changes to the Stores Consistency Check of the Replenishment Master Data PRICAT Data Exchange with user specific fields & planned changes Complaints Processing in Billing IDoc Copy Management Modifications to Store Order BAPI Automatic Vendor Item Determination in Store GR Planned Delivery Time in Workdays VMI for Wholesale Customers Assign Invoice Items to PO and Site BADI for Rounding in Sales Orders Physical Inventory for Open Stores SRS Purchase Order & Returns SRS Ruling Prices SRS Order Rhythms

First Customer Shipment Retail Release 1.2B

General availability SAP Retail integrated in R/3 Standard Release 4.0 Worldwide Rollout

Mass Maintenance Value & Quota Scales Competitor Pricing Pricing enhanced function Layout & Space Management interfaces Additionals integration Allocation enhanced function Promotion enhanced function SAP Retail Store (SRS) Load Building Merchandise Distribution (Cross Docking & Flow Through) Vendor Managed Inventory (VMI) Store Returns Perishables SAP Online Store WM integration Agency Business RIS enhancements

Easy Access, Screen redesign Fast Entry High Performance Retail (HPR) Promotionenhanced function Bonus Buy Allocation enhanced function Markdown enhanced function Logistical Variants Product Catalog enhancement Competitor Pricing enhancem. Market Basket Pricing Replenishment Workbench Additionals improvements Merchandise Distribution enhanced function Perishablesenhanced function MAP (Merchandise & Assortment Planning) MAP integration to Promotions & Allocations BW Retail Templates Sales Order Optimization Layout & Space Management interface Optimization VMI enhancements Logistics Invoice Verification Subs.Settlem. enhan. function POS Inbound & Outbound Optimization Logistics Execution System enhanced function Handling Units Multi Channel Retailing

1997

1998

1999

2000
45

2001

2002

2003

2004

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

Agenda

Development Projects

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Development Projects 2003 / 2004 / 2005

SAP Forecasting & Replenishment (SCM) SAP Merchandise and Assortment Planning (SEM) SAP Profit Center Analytics (BW) SAP POS Data Management (BW) SAP Customer Loyalty Marketing (BW) SAP Enterprise Portals (Store Portal, Buyers Portal) Future Store Initiative Fashion Processes SAP Retail Store Promotions Planning

New Development Projects: Point Solutions, Portals

40 % 40 % 20 %

Customer Projects: SDP Karstadt SCP EDEKA and COOP CH

Continuous Improvement: SAP R/3 Enterprise EE2.00

Master Data SAP Retail Store Promotions Pricing Merchandise Distribution etc.
47

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

SAP Forecasting and Replenishment

SAP Forecasting and Replenishment
Master data Sales Stock DIF's Open Orders
Transfer Sales Data, Stock, DIF's, Open Orders, Master Data

Automatic Replenishment Quantity Calculation

Net Requirem.

Manual Replenishment

R/3 Retail / ERP

Replenishment Quantity Optimization
Exceptions Order Proposals

Exception Handling / Manual Release

OP f. manual proc.

Order Proposal Release Management

Released OP's Autom. Transfer Order Proposals into Orders Released Orders

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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SAP Merchandise and Assortment Planning (SAP MAP)

SAP MAP Strategic Plan Store Plan Merchandise Plan

Total Planning Integration

Strategic planning Store planning Merchandise planning Assortment planning

Open Interfaces (XML)

Assortment Plan

Fulfillment Master Data Assortment Shelf Optimization Price Reduction Purchase Order Allocation

Total Execution Integration

Buying / OTB Allocations Assortments Space Optimization Master Data Management Markdowns

Business Scenarios
Fashion Basics / Lean Category Management

Out of Scope

Promotion Planning Campaign Management

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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SAP MAP Slow Seller Management Minimize Markdowns while Ensuring Optimal Inventory Pre-season: Markdown Planning (Simulation)
Assign markdown profiles and sales patterns to products to simulate: When will the merchandise be sold? How large should each markdown be? What gross margin can I expect?

$35

29.99

In-season: Slow Seller Controlling

System evaluates pre-season plans versus actual performance to automatically propose price reductions based on the markdown profile.

Execution in the Merchandising System

Automatically update retail prices

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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SAP POS Data Management

Sales Analyses of POS Data

BW-Reporting Templates
Store Contr.
Loss Prevent

Promo Analysis

SAP BW

mySAP Landscape POS Inbound Processing Engine

Outbound Interfaces

3rd Party Landscape

Upload of POS Data to SAP BW via POS Inbound Processing Engine

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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Profit Center Analytics It is one Scenario which enhances and improves existing functionality by integrating SAP R/3 Enterprise, SAP BW and SEM. It is based on the store as a profit center and the cost center that is assigned to it Retail ledger in R/3, to replace the data storage for transaction data in EC-PCA. It guarantees efficient handling of big data volume, which is absolutely needed by storebased retailers. Content in SAP BW to increase the reporting functionalities for store managers as well as for management reporting Content in BW for SEM as well as planning layouts and reports in SEM to increase planning functionalities for managers.

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Customer Loyalty Marketing

Measure Results in BW Measure Results in BW

Customer applies for loyalty card Customer applies for loyalty card (store, phone, internet) (store, phone, internet)

Measure Results
Target groups are Target groups are assigned to assigned to campaigns in CRM campaigns in CRM and executed and executed

Submit card application

Execute Campaigns

Maintain Customer Master Data

Maintenance of Maintenance of Master data in CRM Master data in CRM and replication into and replication into BW BW (Application (Application template with template with customer attributes customer attributes delivers basis) delivers basis)

Segement & Build target group

Segment builder accesses Segment builder accesses sales data and creates sales data and creates target groups in CRM target groups in CRM

Sales at POS Upload of POS data To BW

Identify POS customer

Shopper buys at POS Shopper buys at POS with his/her preliminary with his/her preliminary card card (usually a paper version (usually a paper version of the genuine card )) of the genuine card

Once customer master data is available in Once customer master data is available in CRM system ,, matching of customers CRM system matching of customers sales transactions to master data is sales transactions to master data is possible. possible.

Upload of POS sales Upload of POS sales transactions into BW Data transactions into BW Data warehouse warehouse

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Agenda

Future Store Initiative

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Intention of SAP within the FSI Research project on learning how to use RFID technology Target: Get a pilot store live with leading edge technology
RFID on pallet level, case level, for all dry goods RFID on item level for selected articles (CDs, DVDs [theft protection], smart-shelf)

Learn about requirements, benefits and process scenarios coming from RFID in a live environment SAP to achieve leadership position for RFID related software in Retail and Consumer Products

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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RFID - Radio Frequency Identification Key enabling technology for Smart Items RFID is an automated identification and data collection technology, leading to accelerated business processes and more accurate and timely data entry. RFID tags consist of a chip for holding data and an antenna for communicating the data through radio waves.
Controller Interrogator (aka Reader/Scanner) Tag/Transponder

Network

Tag Antenna

Reader API

Air Interface

Many types of tags and readers exist today, i.e. active and passive, read / write, various frequencies etc

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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RFID Advantages and Business Benefits

Advantages: Uniquely identifies every physical object Unsupervised identification
Any orientation No line of sight required

Business Benefits: Transparency along the Supply Chain within tracking of all objects Optimized visibility of the goods flow Minimizing the human resource factor within automatically identification of all goods movements

Multiple read
Anti-collision

Harsh environments Read & Write capability

Dynamic Information Reuse

Amount of data

RFID increases quality, timeliness and depth of information

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale
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RFID Processes in Goods Transport and Delivery

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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RFID Processes in Warehousing and Frontstore

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Agenda

Outlook - Strategic Development Project Fashion

SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale

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Product Fit for 2004 / 2005 - Case Study

SAP R/3 Enterprise 4.70 SAP R/3 Enterprise 4.70
Transactions, controlling, master data management Store group definition Capacity data maintenance Purchase order Markdown control Allocation table Level/capacity type Fixture OTB POS data

PIPE
POS Inbound Processing Engine POS analyses

Planning, reporting, analytical applications

SAP BW 4.0 SAP BW 4.0

SEM BPS
Retail planning OTB Capacity planning Fixture Theme structure

Retraction
Sales info

Analyses for ERP Relevant data

A matrix Allocation strategy Planned articles, OTB, listing information

Theme structure

Planned article

Assortment planning

Extraction
Articles, merchandise categories, SGs, assortments, promos, conditions, theme structure, fixtures, article list

Analyses for F&R Relevant data Transaction data

Addons

Master data, transactions Exceptions

Markdown matrix application A matrix

Actual/ plan data (multidim)

Master data Master data Order proposals Allocation proposals

SCEM

F&R Engine
replenishment process

SAP SCM 4.0 SAP SCM 4.0

SAP CRM > 4.0 SAP CRM > 4.0

Campaigns, promotion planning

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Primarily Requirements
Master data Master data
Article maintenance and selection on Article maintenance and selection on characteristic level characteristic level Article work list for all processes Article work list for all processes Prepacks Prepacks Handling of approx. 6.5 million skus Handling of approx. 6.5 million skus Handling of 200 Department Stores Handling of 200 Department Stores Handling of more than 20.000 departments Handling of more than 20.000 departments

Dr aft
Purchasing Purchasing
Order entry (fast order entry) Order entry (fast order entry) Delivery period (tracking) Delivery period (tracking)

Ve rsi on

Bestseller-/Slow seller management Bestseller-/Slow seller management

Mark-down management Mark-down management

Allocation Allocation
Flexible and short dated allocation Flexible and short dated allocation

Planning & Analysis Planning & Analysis

Assortment planning Assortment planning Rack and shelf planning Rack and shelf planning Closed loop Closed loop Analysis and reporting Analysis and reporting OTB OTB

Invoice verification Invoice verification

Mass maintenance Mass maintenance Payment before shipment Payment before shipment

Vendor-Management Vendor-Management Replenishment Replenishment

Never-out-of-stock (NOS) Never-out-of-stock (NOS) Integration of events Integration of events Capacity check (on shelf level) Capacity check (on shelf level) End-of-season monitoring End-of-season monitoring
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Vendor score card Vendor score card

Processes and challenges for SAP

Top-Down Planning
order Splitting / Open-To-Buy (OTB) Planning

Subsequent settlement Vendor management

vendor sanctioning vendor evaluation

Dr aft

Ve rsi on

Assortment Planning
fashion basics theme structure store grouping capacity planning assortment planning

Master data
article hierarchy store concept article list substitute & replacement styles

Order Generation
fast-order entry simplified Master Data Maintenance OTB generation order controlling (tracking)
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Allocation
pre-allocation (long term view) new-allocation (near goods receipt)

Auto replenishment (NOS) Best / Slow seller management

mark-down planning

Outlook - Collaborative Master Data Management (cMDM)

collaborative Master Data Management

Enterprise Portal
cMDM Advanced Technology Architecture

Business Information Warehouse

Master Data Server mySAP ... R/3 Enterprise non SAP System non SAP System

Object Layer

Service Layer

Provisioning Layer

cMDM Adapter

cMDM Adapter

cMDM Adapter

cMDM Adapter

Content Integrator

Exchange Infrastructure

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Outlook - MDM for Retail development topics

Data Model Preparation 1.
Ensuring of Retail Data Model. Protection of a future Retail project.

Single Article/ SKU 2.

Central maintenance and single distribution

Generic Article/SKU, Set Lot Display 3.

Central Maintenance and distribution

Col. Scenarios, Duplicate check 4.

Central Maintenance and distribution

Retail Sites, Organizational depended MD 5.

Central Maintenance and distribution

Purchasing/ Customer Info record 6.

Central Maintenance and distribution

Assortment, Listing 7.
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Scope for MDM 3.1 Ramp up is planned in August 2005

k n a h T

u o
SAP for Retail
SAP Runs Real Time Retailing

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Sources of Information on SAP for Retail (I) SAP R/3 Enterprise and ERP Information Center: http://service.sap.com/enterprise Information on SAP for Retail: (Retail Service Marketplace) http://service.sap.com/retail Information on the new release and delivery strategy of mySAP.com: http://service.sap.com/releasestrategy SAP Help Portal: http://help.sap.com SAP Enterprise Portal: http://help.sap.com Enterprise Portal SAP NetWeaver mySAP

SAP NetWeaver (Technology): (SAP Service Marketplace) http://service.sap.com/netweaver or http://help.sap.com SAP NetWeaver
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Sources of Information on SAP for Retail (II) Retail Performance Map: http://service.sap.com/performancemap Information on the ramp-up process for bringing SAP solutions to market: http://service.sap.com/rampup SAP System Landscape Directory, description of mySAP.com system landscapes: http://service.sap.com/landscape Platform and Technology Information Center: http://service.sap.com/platforms Information on upgrade, e.g. upgrade services, tools and technology: http://service.sap.com/upgrade Global Trade: http://www.service.sap.com/globaltrade
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Sources of Information on SAP for Retail (III) Information on the changed maintenance strategy, e.g. extensions: http://service.sap.com/MaintenanceStrategy Information on SAP R/3 Interfaces: http://service.sap.com/r3-plug-in Category Management: http://service.sap.com/retail SAP for Retail in Detail Category Management Education: http://www.sap-retail.de/education SAP Retail Homepage: http://www.sap.com/retail SAP Retail Solutions: http://www.sap-retail.de Accessibility: http://www.saplabs.com/accessibility
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Sources of Information on SAP for Retail (IV) Information on Space Management Integration: http://www.sap-si.com services industry solutions retail category_management Information on mySAP ERP: http://service.sap.com/erp Information on Ramp-up Knowledge Transfer (RKT) http://service.sap.com/rkt

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Momentum

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SAP and Karstadt / Quelle AG

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Success Story Metro Cash & Carry

METRO CASH & CARRY INTERNATIONAL GMBH mySAP HUMAN RESOURCES IMPLEMENTATION HELPS METRO MANAGE RETAIL ACTIVITIES WORLDWIDE
With its Metro Cash & Carry stores, which are managed under the brand names Metro and Makro, the Metro Group remains the international market leader in selfservice wholesaling. A benchmark analysis performed by SAP Business Consulting showed that, by implementing mySAP Human Resources throughout its network of stores, the group would experience significant savings and benefits.

Once consolidated and processed, the quantitative and qualitative key figures provided a transparent picture of the operative and strategic potential per application area and for the company overall. Ute Riemann Head of Benchmark Project for MCC.

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Success Story Swiss Post

SCHWEIZERISCHE POST (SWISS POST) IMPLEMENTS mySAP RETAIL TO TRANSFORM 3,300 POST OFFICES INTO RETAIL OUTLETS
Swiss Post turned to mySAP Retail to manage the sales of 4,000 articles across 3,300 post offices. Sales information like article, post office code, quantity sold, and sales price flows from the individual POS systems into mySAP Retail every evening. This enables Swiss Post to replenish stock and analyze sales to determine what is selling, how much inventory needs to be replenished, and how profitable its operations are. With mySAP Retail, we are getting information much faster and at a higher level of detail. The successful implementation will enable us to have a high level of transparency with our sales data. This will help us to quickly react to new customer requirements.
Christian Oberschartner, Project Manager, Swiss Post

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Copyright 2004 SAP AG. All Rights Reserved

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