Retail Merchandising System

AN ANALYSIS ON
THE ROLE OF INFORMATION TECHNOLOGY IN SOLUTION OF
CURRENT MERCHANDIZING PROBLEMS IN RETAIL INDUSTRY

Submitted By:

EPGDIB 2020-21 Hybrid (Group 6)

Mohd Faiz [32A]

Suman Mondal [27A]
Kumar Sachin [19A]
Sahil Jain [25A]
Kalpa Mohan [16A]

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Table of Content
1. Objective 03

2. Digital transformation in retail 04

2.1. Retail Merchandising
2.2. Omni Channel Retailing

3. Current challenges in retail merchandising 06

3.1. Unavailability of right products at right place
3.2. Inventory loss
3.3. Customer Dissatisfaction
3.4. Inaccurate data capture, storage and data accuracy
3.5. Insufficient receiving of PO/ PO reconciliation

4. Involvement of IT as solution provider 08

4.1. Right Product at right time
4.2. Reducing Inventory loss
4.3. Customer Satisfaction
4.4. Data Accuracy and Storage
4.5. Insufficient receiving of PO/ PO reconciliation

5. Oracle Retail Merchandising System (RMS) 10

5.1. Order management
5.2. Inventory Control
5.3. Inventory Adjustment
5.4. Purchase Order receipt (Shipment)
5.5. Stock Quantity
5.6. Replenishment

6. Oracle Retail Allocation 18

6.1. Unique features of Oracle retail allocation

7. Oracle Retail Invoice Matching for correcting PO related issues 19

8.1. Process flow
8.2. Challenges and benefits

8. Omni channel commerce (commerce anywhere) 21

9.1. Customer Order Fulfillment in Commerce Anywhere

9. Conclusion 23

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1. Objective
Retail merchandising is core of any retail organization. When a customer walks
into a store, the colors, sounds, smells, and the way the merchandise feels
combine to deliver an experience to the customer psyche that they may not
even realize. Merchandising is both an activity and a strategy that contributes
to the sale of goods and services by stimulating interest or otherwise enticing
customers to make a purchase. To obtain an effective merchandising strategy,
retailers must understand the pattern of customer choice and make sure a
healthy shelf at stores fulfilled with items what customer desires for. Though
seems simple, these are not easier decisions and retailers have to deal with
massive amount of information coupled with robust merchandising systems to
come to a fruitful conclusion. In this study, we will focus on key problems
retailers are facing in their merchandising operations and how IT can act as an
enabler to solve them.

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2. Digital Transformation in Retail
Retail sector in India is undergoing a rapid transformation fueled by several factors as rising household
income, e-tailing, Government’s push for digital India, easy credit availability and favorable demographics.
‘Unravelling the Indian consumer’ a report by Deloitte and the Retailers Association of India, states –

India is one of the fastest growing major economies globally. The Indian retail market is expected to grow
from USD795 billion in 2017 to USD1.2 trillion by 2021. Further, with ever increasing internet penetration
in the country and a boost in operations of international retailers, the share of the organized retail market
is expected to increase from ~12% in 2017 to 22-25% by 2021.

India has the world’s largest millennial population. They constitute nearly 34% of the country’s total
population falling in the age group of 18-35 years. Due to their hectic lifestyles, convenience shopping is
an important consideration for millennials, hence the explosive growth in, and high tendency to shop
online. Millennials place greater reliance on the ethos and the value system of the brand and prefer
personalized product and service categories as they aim at differentiating themselves from the rest.

The expectations from a modern retailer have changed completely – consumers no longer walk into stores
just to buy products. They are looking forward to an enhanced shopping experience where they get
immersed into a whole new dimension of interaction. They get introduced to new products and features,
engage with technology and devices, experience delectable global cuisines, get absorbed into virtual
entertainment, special events and product launches, etc. Retail is thus evolving into a new dimension of
‘retailtainment’, which is likely to dominate the consumer industry in the near future.

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2.1. Retail Merchandising
Whether digital or in-store, retailers use merchandising to influence customer intent and reach their sales
goals. In both brick-and-mortar and digital stores, a variety of merchandising techniques are used to
arrange products, communicate their value, and create an optimal customer experience.

Modern merchandising systems are the foundation for innovation throughout retail operations; they are
the source that feeds predictive analytics, informs personalization algorithms, and drives change. It is a
dynamic that calls for a new approach, one that replaces aging on-premises systems with cloud services
that gives business teams the ability to support more customer journeys and allows IT teams to focus on
what is most important— customer focused initiatives—faster and more effectively.

In our analysis, we would target common inventory management and merchandising problems face by
retailers followed by further analysis and solutions which could be applied to come over these challenges.

2.2. Omni Channel Retailing

Omni channel retail (or Omni channel commerce) is a multichannel approach to sales that focus on
providing seamless customer experience whether the client is shopping online from a mobile device, a
laptop or in a brick-and-mortar store.

According to Harvard Business Review, 73% of all customers use multiple channels during their purchase
journey. Only when the customer has gathered as much information as possible from a variety of sources
to support their purchase decision, will they decide to buy from a retailer.

Omni channel operations focus on the entire customer experience—not the customer’s individual
experiences on different channels. This is of utmost importance that a multichannel retailer has a robust
system to cater the requirement and we will discuss the solution in later part of this report.

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3. Current Challenges in Retail Merchandising
We have analyzed the current challenges faced by one of the largest fashion retailers and their current
information systems and could conclude following major challenges.

3.1. Unavailability of right products at right place

3.2. Inventory Loss
3.3. Customer Dissatisfaction
3.4. Inaccurate data capture, storage and data accuracy
3.5. Insufficient receiving of PO/ PO reconciliation

3.1. Unavailability of Right Products at Right Place

Keeping products on the shelves and available to customers is a vital part of the retail business. Increasing
inventory or in-store labor is not the only way to drive down out-of-stocks, significant gains can be
achieved at much lower cost by improving the way on-shelf availability of right product in right time. It is
not unusual for a supermarket to miss out on 5% of sales through out-of-stocks. As well as hurting
revenue, poor availability means dissatisfied customers, and poorer financial performance over the long
term. Often, availability suffers because it is not well understood. It is the outcome of a complex chain of
events. Buyers need has to be forecasted and ordered accurately, suppliers need to deliver the right
quantities at the right time, distribution needs to ensure the product reaches the stores, and the stores
themselves need to get it onto the shelves.

3.2. Inventory Loss

Retail shrinkage is a serious retail challenge, especially when its causes cannot be accurately determined.
Somewhere between 1.5% and 2.5% of revenue can be lost depending on the channel. According to the
NRF, the US retail economy lost $45.2 billion in 2015 due to shrinkage.

• Inaccurate or fraudulent fulfillment. “Sometimes it doesn’t even make it to the store. Roughly seven
percent of shrink comes from the vendors in the form of overcharges or undersupply.”
• Human errors. “Human errors count for another 16%.”
• Shoplifting. “Shoplifting counts for 38% of loss.”
• Employee theft. “Employee theft comes in as the second largest cause at 35%.”
• Unexplained or “act of God” shrinkage. “The remaining four percent don’t fall into any of these
categories and are generally chalked up to ‘acts of God’ or left as unsolved mysteries.”

3.3. Customer Dissatisfaction

For a retailer, customer satisfaction is of utmost priority. When a customer walks in stores several factors
leave an impact on customer satisfaction. Well Informed Sales associate, look and feel/ ambiance of
stores, less queue at POS, availability of right product at shelf, ease of making payments are some of the
key factors adding up to customer satisfaction. However, most of the retail store missed to present all
these factors in a well-coordinated way leads to customer dissatisfaction.

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3.4. Inaccurate Data Capture, Storage and Data Accuracy
Most retailers are faced with a data glut. There is widespread availability of detailed data pertaining to
various types of transactions, at various levels in the organization. However, there is considerable
variation in how retailers capture, store, and use this data for their business decisions. Data is typically
captured at various interfaces - customer transactions (simple purchase characteristics to detailed
behavioral tracking), shipments to the store, inventory and warehousing activities, interactions between
the retail outlet and its corporate headquarters, and other interactions with value chain intermediaries
are all potential data sources. However, most of the stores cannot utilize it right way since these data is
not well organized through a central single system so that useful information can be derived from it. Since
no useful information is available from the huge data pool due to lack of central data capture and storage
system, no global reporting takes place resulting in delayed business decision. Difficulties in data retrieval
and manipulation in existing systems are observed due to:

Multiple data sources: Retailers operate with multiple media with multiple database management
systems which are under multiple platforms. Data compatibility is a major resource crunch and challenge,
due to scale and complexity of encoding involved.

Data mapping: Mapping data that has different standards (name, meaning, business rules).

Data accuracy: One of the most important sources of errors and problems. Typical reasons for inaccuracy
include differences in time bases (e.g. one file reflects daily activity another weekly or monthly activity),
and the level of granularity (fine detail can be lost or unseen depending on the storage retrieval system
capabilities).

Business level issues: there are several business level issues for instance, Lack of business focus and
commitment to supporting IT/MIS efforts, Poor appreciation of the VALUE of data for business survival
and growth, Time and costs associated with organization-wide learning, Lack of skilled personnel at the
store/retail level who can use these systems, even if implemented properly.

3.5. Insufficient Receiving of PO/ PO Reconciliation

There are problems related to purchase order from both parties’ seller/vendor and supplier. No tracking
or visibility of the delivery performance: time, cancellations, mis-shipments. Not a clear checking process
against a purchase order (PO), items arriving in pallets with large quantities also generates issues.
Manually counting the items arriving into the warehouse generates miss receive. This happens since
relying on a paper-based system and manually writing down what is delivered, slow goods receipt process.
There is a delay between items being delivered and being available for sale online. These problems make
it difficult to monitor KPIs, judge performance and replace the services if needed. With a warehouse
management system, as goods are scanned in they will be automatically reconciled against a PO. This not
only eliminates the need for this to be done manually, but it also speeds up the process and saves time
and labor.

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4. Involvement of IT as Solution Provider
Use of cutting-edge technological implementation can help retailers to overcome most of the mentioned
challenges.

4.1. Right Product at Right Time

Replenishment allows retailers to manage stock levels at any of their locations. Robust and smart
replenishment ERP systems supporting robust replenishment strategies is required to support retailer
with stock availability and help them to maintain optimum inventory levels in stores. Smart ERP system
provides a set of algorithms that consider existing estimates of demand, sales, and inventory thresholds
to generate automated transfers and Purchase Orders with the objective of maintaining an optimum
inventory level.

The replenishment feature allows stores to automate the ordering process for items by constantly
monitoring inventory conditions and creating orders to fulfill consumer demand according to predefined
replenishment parameters.

4.2. Reducing Inventory Loss

Regardless of how inventory is lost, shrinkage costs retailers a lot of money. To reduce shrinkage a real
level data tracking mechanism (goods entered into the store, goods inventory that were not in shelves,
goods are in shelves etc.) is a must to monitor undersupply from the vendor and to counters human error
in manual tracking and shoplifting.

4.3. Customer Satisfaction

Information technology can help a retailer to create an environment which enhances customer
satisfaction by streamlining inventory, assortment, timely delivery, and single view of stock.

4.4. Data Accuracy and Storage

At the level of store, data capturing is important to understand category size and growth trends,
geographic breakdown of sales and related information, store performance and growth, and the success

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of new product introductions. Several experimental analyses can also be conducted, e.g. testing the
impact of promotions, coupons, shelf space, advertisements, and price elasticity measurement. At the
level of customer, it includes consumer purchase characteristics and tracking, loyalty measurement,
market segmentation, and market basket analysis. Several performance indicators can be tracked and
benchmarked, including the effectiveness of supplier plans and programs, retail category plans, and
category performance at the level of store, region, and customer. Once data is captured, it needs to be
stored in a reliable and accessible format. Several powerful database servers are available in the market,
which can keep pace with retailer data needs, whether it is in the tens of gigabytes, to multiple terabytes.
Additionally, use of cloud storage has been beneficial due to competitive ‘pay as you go pricing’. Further,
the costs of storing data are falling rapidly, with advances in semiconductor technology and furious
competition in cloud storage vendors.

4. 5. Insufficient Receiving of PO/ PO Reconciliation

Solving this problem requires precision during the goods receipt process and the best way to achieve this
is by using an easy-to-use retail management system (RMS) that incorporates barcode scanning. The use
of barcodes eliminates the margin for human error and ensures that all delivered items are correctly
recorded. As a result, the correct stock figures and listed online, meaning fewer oversells or missed sales
opportunities.

After analyzing the challenges and possible solutions, we concluded that implementation of Oracle Retail
Suite coupled with latest machine learning, cloud and AI technologies, retailer can overcome these
difficulties. In this report, we will discuss how implementation of Oracle Retail (Retail ERP) will enable
retailer to counter these challenges and put it into the league of retailers with advanced merchandising
systems.

"I don't know of a major retailer that isn't already buying or trying to buy a software company.
They're realizing they can't do this on their own, they need the advanced technology.” – Bob
Willett, former President of Best Buy International and CIO of Best Buy

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5. Oracle Retail Merchandising System (RMS)
The Oracle Retail Merchandising System (RMS), or Merchandising, is used to execute core merchandising
activities, including product management, inventory replenishment, purchasing, vendor management,
and financial tracking. RMS can handle multiple business challenges faced by retailers pertaining to
purchasing, inventory management, cost management, replenishment, and foundation data. RMS
application can be hosted as on-premises or cloud depending on the client requirement.

Following operations are supported by RMS.

• Foundation Data Management

• Purchasing
• Contracts
• Deals
• Cost Management
• Inventory Control
• Replenishment
• Franchisee Management
• Stock Ledger

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5.1. Order Management
In Oracle retail, the purchase order is a legal agreement between a supplier and retailer for the purchase
of merchandise. Key information on any purchase order includes the supplier, terms, dates, items,
quantities, costs, and locations.

In RMS, purchase order functionality supports following key business processes.

• Creation and approval of purchase order

• Communication of the purchase order to the supplier and other systems
• Receipt of an advance shipping notification against the purchase order
• Receipt of the product on the purchase order at the store or warehouse
• Receiving or entering the invoice from the supplier for the product shipped on the purchase
order.
• Matching up the invoice against the purchase order and the receipt
• Paying the supplier for product on purchase order

The Purchase Order module allows you to create and maintain purchase orders in a variety of ways. It
provides commitments to vendors for products in specific amounts for specified locations. Purchase
orders are created manually or automatically through replenishment or from an external system. They
can be created against entered contracts and deals, or directly through direct store delivery or Vendor
Managed Inventory (VMI). RMS also provides the ability to maintain the items, locations, and quantities
ordered for Purchase Orders

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5.2. Inventory Control
Inventory functionality in RMS is the core of the application. Inventory is tracked perpetually and
financially in RMS. The following describes perpetual inventory tracking. For information on financial
inventory tracking, see Stock Ledger.

RMS achieves inventory control through functions that include transfers, Return to Vendor (RTV),
Inventory Adjustments, Sales Upload, Purchase Order Receipts (shipments), Stock Counts, Allocations,
Franchise Orders and Returns, and Customer Orders.

Inventory transfers in RMS provide an organized framework for monitoring the movement of stock. RMS
creates and maintains transfers; however, you can also interface transfer information into RMS from other
systems.

RMS supports several different types of transfers such as intercompany transfers, book transfers,
Purchase Order-linked transfers, externally generated transfers, customer orders and franchise order.
Transfer functions also support the movement of one or more items between two internal RMS locations,
and multi-leg transfers in which the intermediate location is considered a finisher location. Finishers are
locations where work is performed on merchandise, such as dying fabric and attaching labels.

Mass return transfers are used to reallocate merchandise to locations or to return merchandise to the
supplier.

Return Supplier
To
Vendor

Store
Order
Return
To
Direct Vendor
Delivery

Transfer
Request
Store
Order
Transfer

Store A Warehouse
Delivery
Store B Warehouse

Return To
Warehouse

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5.3. Inventory Adjustment
Inventory adjustments are used to increase or decrease inventory to account for events that occur outside
the normal course of business (for example, receipts, sales, stock counts). Inventory adjustments are
created in RMS or imported from an external system (store or warehouse application). RMS supports two
types of inventory adjustments; stock on hand or unavailable inventory. Inventory adjustments can also
be created by locations for multiple items, by item for multiple locations, or through a product
transformation for a specific location.

5.4. Purchase Order receipt (Shipment)

Purchase order receipts (Shipments) record the increment to on-hand when goods are received from a
supplier. Weighted average cost (WAC) is recalculated at time of receipt using the PO landed cost.
Transaction audit records are created for financial audit, and the receiver is made available for invoice
matching.

5.5. Stock Counts

Stock count is the processes by which inventory is counted in the store and compared against the system
inventory level for discrepancies. RMS supports two types of stock counts:

Unit Stock Counts: These adjust the on-hand quantities for the item-locations affected and create an
inventory adjustment transaction for the stock ledger.

Unit and value stock counts: These adjust the on-hand quantities for the item-locations affected and
adjust the stock ledger to the results of the stock count.

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5.6. Replenishment
Replenishment is an order for additional goods from a warehouse or supplier, in order to replenish
depleted stock in a store or warehouse. Replenishment in RMS allows retailers to set up the automatic
ordering of items, and RMS can monitor the inventory positions at locations throughout a retail
enterprise, down to the item/location levels. Depending on the algorithm used, RMS replenishment can
be configured to make recommendations, which can be manually added to a purchase order or transfer,
or it can create purchase orders or transfers directly, depending on the level of automation desired.

Automated replenishment parameters are set up at the supplier, supplier/department, and

supplier/location or supplier/department/location level. Items can be set up for automated
replenishment through the Item Maintenance dialog, either individually or through item lists.

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• Reduces manual processes and increase efficiencies by providing automation of ordering process
• Monitors available inventory at item/location level helping users concentrate on managing
exceptions
• Generates orders or recommended order quantities (ROQ) to meet need
• Multiple parameters must be set in order for an item to be placed on replenishment, influencing
the ROQ calculations
• Note: Supplier replenishment parameter configuration is performed at the supplier site level

Automated replenishment also supports different methods to determining whether purchase orders are
created, and quantities ordered. These replenishment methods are applied at the item/location.

Constant

• Constant is a stock-oriented method in which the item is replenished when the inventory level
falls below a specified level.
• Order required when available inventory is less than maximum
• “Sell One, Buy One”
• Does not consider demand trends, future forecasts, or seasonality
• Can have Increment % applied

Min/ Max

Min/Max is a stock-oriented method in which the item is replenished up to the maximum when the
inventory level falls below a specified minimum stock level.

• User defines maximum and minimum stock

• Order triggered when available inventory is less than minimum and fills to the maximum
• Does not consider demand trends, future forecasts, or seasonality
• Effective for very slow to slow selling items & items purchased in large multiples
• Can have Increment % Applied

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Floating Point

• Floating Point is a stock-oriented method in which the item is replenished when the inventory
level falls below a dynamic system-calculated maximum stock level.
• Time Supply is a stock-oriented method in which replenishment is based on the number of days
of supply for the item a retailer wants in inventory. The Time Supply method requires a forecasting
system.
• Time Supply Seasonal is the same as Time Supply, but it takes seasonality and terminal stock into
account. The Time Supply Seasonal method requires a forecasting system.

Time Supply

• Preferred method to prevent stock-outs and maintain a constant inventory

• User specifies min and max days of supply
• Actual min and max inventory calculated using forecast data
• A time supply horizon is used to calculate the average rate of sales. This can be specified in days:
– Increase time supply horizon – to smooth out spikes – Decrease time supply horizon – where
available forecast days is less than max days of supply

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Dynamic

• The most complex replenishment method

• Minimizes stock on hand, while preventing stock outs
• Replenishes only quantity required between each replenishment cycle
• Considers forecasted demand, review & lead times, and available inventory in calculation
• Dynamic replenishment also considers the following attributes when calculating ROQ:
• Service level - Determines the level of safety stock that is desired
• Inventory selling days – desired inventory turn objectives
• Lost sales factor – allows any lost sales in the last replenishment period to be factored into the
next replenishment period
• Dynamic Seasonal: Combines Dynamic with end of season terminal stock goal Dynamic Seasonal
is the same as Dynamic, but it takes seasonality and terminal stock into account. The Dynamic
Seasonal method requires a forecasting system.

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6. Oracle Retail Allocation

Inventory is the single most important physical asset of a retailer. The ability to accurately and efficiently
allocate merchandise is one of the most challenging, yet critical areas of retail. Having the right item in
the right place, at the right time, is key to converting sales and customer satisfaction. Agility and efficiency
in allocating merchandising in a multi-channel world is just as important. Retailers need an allocation
solution that is tightly integrated with plans, purchase orders, supply chain updates, and real-time
inventory levels throughout the supply chain.

Oracle Retail Allocation enables retailers to deliver on their promise of getting product in the right place
at the right time with a powerful, easy to use, and accurate method of allocating merchandise. Retailers
create allocations within a configurable, user-centric workflow for maximum efficiency. Allocations can
be done in advance of an order’s arrival or at the last minute to leverage real-time sales and inventory
information. Incoming orders and warehouse stock can be allocated on the same allocation to optimize
the merchandise flow and collection quantities in the store. Multiple parameters related to items,
locations, and rules control the final allocation results. The tool determines store need based on metrics
that fit the product, store characteristics and product life cycle. The result is an allocation based on
individual store need, which is the key to maximizing sales and profits.

6.1 Unique Features of Oracle Retail Allocation

Determine Need at the SKU/Location Level Oracle Retail Allocation not only considers the gross need for
a particular item and location combination, but it also takes into account factors such as real time stock
on hand, on order, reserved, backorder and in-transit inventory figures to arrive at the true net need for
the item/location. The tool uses sophisticated algorithms to determine how to spread the available
inventory across all the locations’ net need, providing an allocation that reduces the likelihood of
overstocks and subsequent future markdowns.

Role-Based Persona-based dashboards provide the Allocator with real-time information they need to both
create and maintain their allocations. The entire UI is focused on user behavior, providing multiple
methods to view, filter, and adjust the allocation results. Dashboards also highlight their incoming
purchase orders due to arrive in the next number of weeks while easily notifying the allocator of any issues
that require their attention.

Multiple Allocation Methods By offering a variety of allocation rules and parameters, Oracle Retail
Allocation provides a robust set of options to meet the needs of retailers of all sizes and verticals.
Allocation needs can be determined based on manual input, historical data, plan information, demand
forecasts, or a combination of plan and history, which compares the actual sales to plan and re-forecasts
based on actual performance in-season.

Maximize Productivity Allocators work with all types of items and item behavior which changes across
their lifecycles. Oracle Retail Allocation provides a flexible workflow with configurable dashboards. It
meets the various lifecycle requirements while promoting efficiency, simplifying processes, and reducing
time and cost. Also, via integration with Oracle Retail Price Management, there is visibility to the retail
values of the allocation.

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Promote Buying Accuracy What-if allocation modeling allows the retailer to apply different methods and
parameters during the allocation process and they can create purchase orders automatically within the
merchandising system based on the bottom-up unconstrained demand at the item/location level.

7. Oracle Retail Invoice Matching for Correcting PO Related Issues

After planning, purchasing, and receiving merchandise, retailers must ensure that vendors get accurate
and timely payments for the products received. With often extremely large volumes of purchase orders,
receipts and invoices, retailers need a configurable, automated solution that allows them to manage by
exception and quickly resolve any discrepancies.

Automating invoice matching can have a significant impact to a retailer’s margin and required headcount.
Companies that successfully automate and streamline the matching process focus on defining rules to
identify the exceptions, use automation paired with workflows to resolve the problem quickly, and send
the invoice for payment as soon as possible. Invoicing discrepancies and their inaccurate information can
affect inventory costs, reduce margins, impact manual work effort, and negatively impact supplier
relationships.

Oracle Retail Invoice Matching

provides retailers with a way to
efficiently manage the matching,
reconciliation, and payment of
supplier invoices. The configurable,
automated matching engine
significantly minimizes the volume of
invoices (and corresponding
headcount) required to perform manual intervention, while policy based automated discrepancy
resolution ensures discrepancies are automatically applied or routed to the right people for resolution.
Once the invoices are matched (or resolved), they are then posted with any corresponding documents to
financials.

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7.1 Process Flow

7.2. Challenges and Benefits

Common Retail Challenges Benefits

Highly automated processes minimize manual

intervention through complex multi-dimensional
Increase matching productivity matching engines while automated 'routing' provides
efficient movement of information throughout the
organization to support discrepancy resolution.

Improve inventory cost and gross Timely identification and resolution of discrepancies
helps ensure inventory adjustments can be made
margin accuracy prior to sale of goods to improve gross margin
accuracy.

Invoice Matching helps retailers manage the

payment process and maximize net cash on hand by
Improve cash management
ensuring timely discrepancy identification and
routing based on cash discount or invoice due dates.

Best practice for invoice matching is to perform the

verification activity within the merchandise system
where the foundation and merchandise data is
Reduce the Total Cost of Ownership (TCO) readily available. Invoice Matching lowers the total
cost of ownership by minimizing interface
development due to its tight integration with the
Oracle Retail solution suite.

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8. Omni Channel Commerce (Commerce Anywhere)

"Retailers estimate $45 million of revenue is lost per billion dollars of revenue due to lack of
cross-channel capabilities.” – Gaurav Pant, research director for EKN

The ability to support selling to customers through multiple channels is critical for retailers today. In
addition to (or instead of) physical or brick and mortar store fronts, most retailers now have an
ecommerce presence, which requires the need to support customer ordering using web, mobile, call
center, and even placing orders for customers in the store to be fulfilled elsewhere. In addition to the
taking and fulfilling of customer orders, retailers are also looking to provide a seamless experience to their
customers, which involves the ability to purchase any item in their assortment through any channel,
supporting common pricing models across all channels and supporting the return of merchandise to any
channel, regardless of where it was originally purchased. Many retailers are also looking to grow their
business by expanding into business to business sales through a wholesaling channel. As part of the larger
Oracle Retail Commerce Anywhere solution, the Merchandising applications provide functionality to
support these requirements, primarily through the Oracle Retail Sales Audit (ReSA), Oracle Retail
Merchandising System (RMS,) and Oracle Retail Price Management (RPM) applications. These applications
work in conjunction with the following applications to provide item, pricing, and inventory information
and to manage the order through the Oracle Retail fulfillment process:

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Online Order Capture (OOC) system, which is responsible for capturing ecommerce orders

Order Management System (OMS), which is responsible for managing the order through its lifecycle from
capture at the OOC through fulfillment

Oracle Retail Point-of-Service (ORPOS), which is the in-store point of entry for customer orders, and is
used as the point of pickup, and potentially payment, for orders picked up in the store and also for
processing customer order returns to the store

Oracle Retail Store Inventory

Management (SIM), which is used
for both providing real-time
inventory information for stores in
support of the order capture
process and for fulfillment of orders
in the store – either by shipment
from the store or customer pickup

Oracle Retail Warehouse

Management System (RWMS),
which is used for fulfillment of
customer orders from warehouse
inventory and processing of
customer order returns in the
warehouse.

8.1. Customer Order Fulfillment in Commerce Anywhere

Commerce anywhere works on a network with an ambition to grow and provide buyable selection parity
across wide area (states spread across the nation or nearby nations) of customers and best delivery
experience at the lowest possible cost. Commerce anywhere e eligibility enables 3 distinct opportunities-

1) Fulfilment network is a prerequisite for localization which allows to grow the selection in all possible
locales (locales are not obliged to have a local vendor in order to list an offering for a product).
2) Remote fulfillment which allows for a local order to be fulfilled with remote inventory (e.g. a Delhi
customer orders a product on ecommerce site and his/her order is fulfilled from a Chennai warehouse).
This enables us to:

• Increase the stock selection we offer to our customers by pooling inventory across the nation and
therefore compensating for demand variability. Effectively this reduces out of stock situations. If
a marketplace (Delhi) is out of stock locally, it will still show an active offer on the website due to
another locale being in stock.
• Optimize the fulfillment strategy for a product by choosing the best warehouse across the nation
that can fulfill the customer promise at the lower cost on time

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3) Sourcing cost optimization (SCO) which allows vendor selection to choose the best vendor to source
across the nation instead of just locally available vendors

Commerce Anywhere eligibility can be 'Remotely Sourced' and

can be 'Remotely Fulfilled' across the nation. 'Remote Sourcing'
is the ability for vendor selection to choose vendors from
countries other than the vendors which reside in the country
associated with the marketplace (e.g. Delhi) 'Remote
Fulfillment' is known as ‘Inventory Sharing' is the ability for one
marketplace to utilize the inventory owned by other
marketplace (for example – Delhi marketplace utilizes goods
owned by the Chennai marketplace. Goods which usually (but
not always) reside in Chennai).

Not all products are eligible to cross international borders.

There can be differences in state/country-specific regulations (legal issues) or operational constraints in
fulfillment warehouses due to size, weight, composition of the products (operational issues). Oracle RMS
incorporates a feature to auto locate the inventory and auto generate the demand from using remote
fulfillment with a use of inventory sharing.

9. Conclusion
For many retailers, the next wave of progress begins with transforming merchandising systems, and with
full executive leadership support, will allow the business to remain flexible and progressive. The sooner
dying legacy systems are transformed, the sooner other aspects of the organization benefit.

In current case, retailer has multiple legacy in-house and external systems posing a challenge to maintain
data integrity and higher cost is required to maintain all these applications. The core value of moving to a
world-class merchandising cloud/On-premises system is to avoid the cost and complications associated
with building your own solution from scratch. By upgrading to a modern merchandising solution, retailer
would be able to dramatically simplify ongoing integrations with the array of financial, store, commerce,
supply chain, planning and other operations that rely on merchandising for critical item and inventory
data.

The implementation of latest Oracle Retail Merchandising System will allow retailer to bring in greater
levels of operational efficiency and customer centricity in their business model and will enable retailer to
come over the major merchandising challenges and help it to maximize its operational efficiency by using
robust purchasing and inventory module which will enhance the scalability and further equip retailers to
have a control on their inventory with advance auto-replenishment and purchasing process.

It is recommended that along with Retail Merchandising System, retailer also implement other oracle
retail modules part of oracle retail suite to get benefit of seamless integrations.

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“Our transformational initiative allowed us to evolve and efficiently prepare for growth opportunities
today and tomorrow. By gaining visibility into inventory and adopting industry best practice, we can better
anticipate demand and plan inventory placement. The robust Oracle solution provides a consistent and
reliable core operations engine.” – Frederico Santos, CIO & CFO, Parfois

References
https://www2.deloitte.com/content/dam/Deloitte/in/Documents/CIP/in-cip-disruptions-in-retail-noexp.pdf

https://www.oracle.com/a/ocom/docs/adv/merchandising_guidebook-
pa.pdf?elqTrackId=616bba8445fa4a428e9740463e01be95&elqaid=76316&elqat=2

https://docs.oracle.com/cd/E12448_01/rms/pdf/160/html/implementation_guide/toc.htm

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