SAP For Retail: SAP Runs Real Time Retailing

SAP for Retail
SAP Runs Real Time Retailing
SAP AG 2004 - Andreas Lueckler, Industry Business Unit Retail & Wholesale 1
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
Agenda
SAP Retail Customer
Retail Customers 2003 compared to Dec 2002
Retail Customers Worldwide 1.696 (1367)

Europe/Middle East/Africa 1.221 (1024)
Americas 268 (225)
Asia Pacific 207 (184)
M C13 Customers Installations Live Install. Systems

TOTAL 1.696 3.736 1.468 7.427
EM EA 1.221 2.438 1.003 5.018
AM ERICAS 268 688 208 1.351
APA 207 593 256 1.058
Merchandise Management Customers**369 (269)

Europe/Middle East/Africa 222 (188)
Americas 100 (52)
Asia Pacific 47 (29)
*Source: ISP/CIS reporting, not incl. are the customer types SAP internal, -partner, -hardware partner and -logo partner.
**Including Staffworks customers
Strong customer base worldwide
Grocery Health & Beauty
Convenience
Postal Services/ Telco
Fashion General Merchandiser
Catalogue Mail Order/ Internet Selling
Misc. Speciality Misc. Speciality
DIY/ Home Improvement Wholesale/ Cash&Carry/ Franchise Business
Home Furnishings
Go Lives 2003
Live with SAP Enterprise 4.7 Live with mySAP Retail

Incl. Purchasing, Master Data, Implementation time: 6 months
Logistics (incl. VMI)
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
Live with SAP Retail Enterprise time: approx. 12 months
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 Genossenschafts-
Bund, 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 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
Agenda
Best Practices in Retail
Segmentation of the Retail Industry
Best
Best Practices
Practices Fashion
Fashion e.g. textiles, fashion, shoes
for
for
SAP
SAP for
for Retail
Retail
e.g. do-it-yourself, electrical,
Hard
Hard Goods
Goods
Standardization
Standardization of
of toys, sport equipment
Retail
Retail Enterprises
Enterprises
into
into four
four e.g. supermarket, discount store,
main
main segments
segments Food
Food convenience store, hypermarket,
cash&carry
e.g. supplying wholesale,

Preconfigured
Preconfigured Wholesale
Wholesale Internet, mail-order
Systems
Systems
What are SAP Best Practices for Retail?
Traditional project
Enable
Enable fast
fast and
Working CRMeasy
and easy
prototype
implementation
implementation of
of SAP
SAP for
for Retail
Retail
With SAP
Best Practices Demonstration
Demonstration of
of aa solution
solution that
that
is
is easy
easy to:
to:
identify with
implement
adapt to specific
requirements
Get
Get aa living
living and
and fully
fully documented
documented
prototype
prototype within
within days
days that
that you
you
can
can rapidly
rapidly turn
turn into
into aa productive
productive
solution
solution
Time and effort savings
Identification and anticipation of reusable business

processes and project activities
Agenda
mySAP ERP
What is mySAP ERP?
mySAP ERP is the successor ERP offering to

SAP R/3 Enterprise
Functionality-wise mySAP ERP: R/3
R/3
Enterprise
Enterprise
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)
Technology-wise mySAP ERP:
Is built on SAP NetWeaver mySAP
ERP
(From 2004) further integration with
SAP NetWeaver (Enterprise Portal, Exchange
Infrastructure and SAP BW) SAP NetWeaver
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
The Architecture of mySAP ERP
mySAP ERP Edition 2004

Application
mySAP ERP Edition 2003 Additional Components
Self-Service Procurement
Additional Components
Self Services Internet Sales
and more
Self-Service Procurement
Internet Sales Composite Applications
Strategic Enterprise Management SAP ERP Central Component 5.0
and more Self Services
SAP R/3 Enterprise SAP R/3 Enterprise Strategic Enterprise Management
SAP Enterprise SAP ECC Extension Set

SAP R/3 Extension Set
SAP Enterprise Extension Set
up to 4.6C
Switch
SAP R/3 Framework
SAP ECC Core
Application SAP R/3 Enterprise Core
Enterprise Core
SAP Basis SAP Web SAP NetWeaver SAP NetWeaver 2004
Application Server PEOPLE INTEGRATION PEOPLE INTEGRATION
Composite Application Framework
Composite Application Framework

Multi Channel Access Multi Channel Access
Portal Collaboration Portal Collaboration
Life Cycle Mgmt
Life Cycle Mgmt

INFORMATION INTEGRATION INFORMATION INTEGRATION
Bus. Intelligence Knowledge Mgmt Bus. Intelligence Knowledge Mgmt
Master Data Mgmt Master Data Mgmt
Technology
PROCESS INTEGRATION PROCESS INTEGRATION

Integration Business Integration Business
Broker Process Mgmt Broker Process Mgmt
APPLICATION PLATFORM APPLICATION PLATFORM

J2EE ABAP J2EE ABAP
DB and OS Abstraction DB and OS Abstraction
Release Strategy SAP R/3 and mySAP ERP

Other components (e.g. Self Service Procurement)
(e.g. mySAP ERP or mySAP Business Suite)
SAP ERP Central Component 5.0

SAP ECC Extension Set 5.00
Available with mySAP contracts only
SAP ECC Core 5.0
SAP NetWeaver04

Other components (e.g. Self Service Procurement)
SAP R/3 Enterprise
SAP R/3 Enterprise Extension Set 2.00
SAP R/3 Enterprise Core 4.7
SAP NetWeaver03
SAP R/3 contract
Available with
SAP R/3 Enterprise

SAP R/3 Enterprise Core 4.7
SAP R/3 4.6C
2002 2003 2004 2005 2006 2007 2008 2009
The Architecture of SAP R/3 Enterprise
SAP R/3 Enterprise
Optional new
SAP R/3 Enterprise functional enhancements
Extension Set 1.10 + 2.00 (SAP R/3 Enterprise Extension Sets)
With SAP R/3 Enterprise, SAP R/3 Enterprise Tuned Core,

SAP has introduced a optimized for Performance
Core 4.7 (SAP R/3 Enterprise Core)
new development strategy.
Primary focus: making
deployment of new
functionality optional.
Plus: stability of existing
processes Technology &
SAP Web AS 6.20 + 6.30
infrastructure enhancements
(SAP Web Application Server)
The Architecture of SAP ERP Central Component 5.0
SAP ERP Central Component 5.0
Optional new Ongoing consolidation of

functional enhancements SAP ECC Extension Set 5.00 additional industry add-ons into
(SAP ECC Extension Sets) Extension Set layer
Traditional functionality as Optional enhancements

part of the SAP ECC Core SAP ECC Core 5.0 on user interface for
(SAP ECC Core 5.0) SAP Enterprise Portal
SAP BW 3.5*
Latest SAP Web AS
SAP ITS**
synchronized with Integrated SAP BW 3.5 and
SAP NetWeaver 04 SAP Web AS 6.40 Internet Transaction Server
(SAP Web AS 6.40)
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
Agenda
SAP R/3 Enterprise in Retail
Retailers Landscape
Strategic
Planning
Procurement
Consumer
Vendor
Sales
SCM BI CRM
Operative
planning
Merchandise
Management
SAP Business Warehouse: Architecture
Knowledge Discovery / Data Mining
Algorithms
Customer Groups Buying Patterns
Subgroups e.g. Companion Sales

Bargain hunters When?
Regular customers
Strategic customers What?
How?
C
A
B e.g. Beer and Tooth Paste
bought together on Thursday
Consumers evenings shopping
ballot paper
Direct marketing Promotion Planning

Target group specific Shelf optimization
assortments Assortment planning
Marketing controlling POS data
Consumer data
BW Business Content for mySAP Retail Enterprise
Data Mining
Integration
Category Article POS Data
Management Infosystem Management
Store Campbell
Controlling Integration
Market Close the Customer
Data Loop Relation
RMA MAP
Integration Integration
Features of a flexible merchandise planning system I
Business Information Warehouse
Document Management
Complex Processes
Easy to use Different Currencies

Multiple Key figures to plan
US $
398

157 005
SG $
Features of a flexible merchandise planning system II
Planning versions
Complex Hierarchies B
A
Value and unit planning
Flexible Input templates

UM 1000
Temporal dimensions WE
(UM-WE) / UM
800
0,2
UMS WE UMS-WE
90
1000 500 500
80
70
2000 1400 600
60
3000 2000 1000
50
40
40
Jan Febr . Mrz Apr il
30
20
10
0 Plan Ist
Features of a flexible merchandise planning system III
Interfaces
Authorizations
Workflow
Allocation table / Promotion
Store
Store A
A Store
Store B
B
New Article
Special
Special buy
buy
-20
-20 %
%
Article and
Characteristic Prepack Allocation
Planning Planning
Store Management with Enterprise Portals
BW Internet SAP R/3

Workflow
Reporting Retail
SAP Retail POS SAP R/3 Mobile

Store Third Party HR Data
Capture
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
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 Retail Store - Architecture
R/3 Enterprise Dialog

IDoc/RFC
Business
ITS
Connector
XML HTML
Business
Connector
POSition
SAP-XML
SAP-XML
SAP Retail Store Application Structure
Login-
Screen
Main Menu
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%)*
*) 100 Idoc/store with
Runtime ca. 18 min ( more than 330 million line items / h) 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

Planning Workbench - Process overview
Forecast
Replenishment
Automatic Automatic Creation Purchase Order

Load Building Purchase Order Creation manually
Planning
Workbench
Merchandise Distribution
Synchronized procurement and issue

achieved by means of a fixed assignment
Planning, monitoring, and control of the
accelerated processing methods (cross-
docking, flow-through) in the distribution
center on the basis of this assignment
Two phases:
Planning Goods Receipt
Push
Pull Goods Issue
Processing
Cross-Docking
Flow-through
Returns in Retailing
Mail order
return
Return to
vendor Retail return
Consumers
External vendor (identifiable or non-
identifiable customers)
Store
Store
return
Return to
vendor
Return from customer

Wholesale Customer
Distribution center
Store and Assortment Management in SAP for Retail
Merchandise Category Merchandise Category

Soft Drinks Soft Drinks
Cola, Sparkling Water etc. Cola, Sparkling Water etc.
Time Period Time Period
Assortment
Local Assortment Local Assortment

assortment assortment 02 03
Beverages Beverages
Reference Store
for Assortment
Automatically
generated Optional System Required
Optional
Store Store
Store A B C D Store A B C D
The Allocation Management Process
Head
Head office
office
Head office
plans
plans coordinates
coordinates monitors
monitors
Merchandise is
procured and
allocated Vendor
Vendor
Distribution center
Store
Store
Store
Store Wholesale
Store
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.
The Promotion Management Process
Promotion
final
processing Promotion
planning
Carrying
out the
promotion
Promotion
subsequent
processing
Mark-Down Planning End of Season Process
Planning of markdowns
Select articles and sites
Article (also based on characteristic value)
Pricephases
Rel. price
Sales prices
Markdown in %
80% Quantities (planned sales quantity,
100% 50% 30%
stock remaining at end of season, ...)
Calculate margins
Markdown rule
Time Price activation
Generate condition records
Update calculation
Sale of articles
Feedback from POS
Adapt markdown planning
(where necessary) Analysis of sales activity
Move price phases Compare planned /actual sales

Remaining stock
Increase markdown in % Range of coverage
Agenda
Evolution SAP for Retail
Evolution SAP for Retail from 1.2B to R/3 Enterprise 2.0
SAP R/3 mySAP

ERP
Retail Enterprise
SAP NetWeaver
1.2B 1.10
z SAP MAP (SEM)
z SAP Forecasting & Replenishment
z Open mySAP.com integration z SAP POS Data Management
z Web Application Server 6.20 z SAP Profit Center Analytics
z BADI (Business Add-Inn) z SAP Customer Loyalty Marketing
z Easy Access, Screen redesign z Business Configuration Sets z Portal Retail Business Packages
z Fast Entry z HPR fully integrated z Future Store Initiative
z High Performance Retail (HPR) z HPR Assortment List
z Promotionenhanced function z Store and Assortment Mgmt. z Overlapping Promotions
z Bonus Buy z New Mass Maintenance Tool z Promotion Delivery Phases
z Allocation enhanced function z Style (Variant) Matrix z Family Pricing
z Markdown enhanced function z MAP enhanced function z Retail Revenue Mgmt. Interface
z Mass Maintenance z Logistical Variants z Prepack Allocation Planning z Cross-Docking (considering DC
z Value & Quota Scales z Product Catalog enhancement z Store Manager Portal Stock at Delivery Creation)
z Competitor Pricing z Competitor Pricing enhancem. z SAP Retail Store PDC XML z Cross-Docking (Automatic Handling
z Pricing enhanced z Market Basket Pricing z SAP Retail Store POS XML of Structured Articles)
function z Replenishment Workbench z Markdown Pl.-enhanced function z Stock Transfer for Consignment
z Layout & Space z Additionals improvements z Allocation - enhanced function z Authorities for Layout Workbench
Management interfaces z Merchandise Distribution z Allocation Strategy z Allocation based on Shelves
z Additionals integration enhanced function z Promotion - enhanced function z Communication of Placement
z Allocation enhanced z Perishablesenhanced function z Replenishment Workbench Changes to the Stores
function z MAP (Merchandise & enhancements z Consistency Check of the
z Promotion enhanced Assortment Planning) z Multi-Step Replenishment Replenishment Master Data
function z MAP integration to Promotions z AHD / PDF in Replenishment z PRICAT Data Exchange with user
z SAP Retail Store (SRS) & Allocations z Planned Delivery Time specific fields & planned changes
z Load Building z BW Retail Templates z Order Cancellation z Complaints Processing in Billing
z Merchandise z Sales Order Optimization z Space Management - enhanced z IDoc Copy Management
Distribution (Cross z Layout & Space Management function z Modifications to Store Order BAPI
Docking & Flow interface Optimization z Layout Workbench z Automatic Vendor Item
Through) z VMI enhancements z Merchandise Distribution - Determination in Store GR
z Vendor Managed z Logistics Invoice Verification enhanced function z Planned Delivery Time in Workdays
Inventory (VMI) z Subs.Settlem. enhan. function z Logistics Execution System z VMI for Wholesale Customers
z General availability z Store Returns z POS Inbound & Outbound enhanced function z Assign Invoice Items to PO and Site
z SAP Retail z Perishables Optimization z TRM in LES z BADI for Rounding in Sales Orders
z First Customer integrated in R/3 z SAP Online Store z Logistics Execution System z Perishables enhanced function z Physical Inventory for Open Stores
Shipment Standard Release z WM integration enhanced function z Global Trade z SRS Purchase Order & Returns
z Retail Release 4.0 z Agency Business z Handling Units z Retail Method of Accounting z SRS Ruling Prices
1.2B z Worldwide Rollout z RIS enhancements z Multi Channel Retailing z Consumer Decision Tree z SRS Order Rhythms
1997 1998 1999 2000 2001 2002 2003 2004
Agenda
Development Projects
Development Projects 2003 / 2004 / 2005
SAP Forecasting & Replenishment (SCM)

SAP Merchandise and Assortment Planning (SEM)
New Development Projects:
Point Solutions, Portals
SAP Profit Center Analytics (BW)
SAP POS Data Management (BW)
SAP Customer Loyalty Marketing (BW)
40 %
SAP Enterprise Portals (Store Portal, Buyers Portal)
Customer Projects:
40 %
Fashion Processes
SDP Karstadt SAP Retail Store
SCP EDEKA and COOP CH Promotions Planning
Master Data
20 %
SAP Retail Store
Continuous Improvement: Promotions
SAP R/3 Enterprise EE2.00 Pricing
Merchandise Distribution
etc.
SAP Forecasting and Replenishment
SAP Forecasting and Replenishment
Master Open Transfer Sales Data,
Sales Stock DIF's Stock, DIF's, Open
data Orders
Orders, Master Data
Automatic Replenishment
Quantity Calculation Manual Replenishment
Net
Requirem.
R/3 Retail / ERP

Replenishment Quantity
Optimization
Order Pro-
Exceptions posals
Exception Handling OP f. man- Order Proposal

/ Manual Release ual proc. Release Management
Autom. Transfer Released

Released Order Proposals Orders
OP's into Orders
SAP Merchandise and Assortment Planning (SAP MAP)
SAP MAP
Strategic Plan Total Planning Integration
Strategic planning
Store Plan Merchandise Plan Store planning
Merchandise planning
Assortment planning
Assortment Plan
Open Interfaces
(XML)
Fulfillment Total Execution Integration

Master Data Buying / OTB
Assortment Purchase Order Allocations
Shelf Optimization Assortments
Allocation Space Optimization
Price Reduction
Master Data Management
Markdowns
Business Scenarios Out of Scope
Fashion Promotion Planning
Basics / Lean Category Campaign Management
Management
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?
In-season: Slow Seller Controlling

29.99 System evaluates pre-season plans versus
$35 actual performance to automatically
propose price reductions based on the
markdown profile.
Execution in the Merchandising System

Automatically update retail prices
SAP POS Data Management
Sales Analyses of POS Data

Store Loss Promo
Analysis
BW-Reporting
Contr. Prevent
Templates
SAP BW
mySAP
Landscape
POS Inbound
Outbound Interfaces
Processing Engine
3rd Party
Landscape
Upload of POS Data to SAP BW

via POS Inbound Processing Engine
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.
Customer Loyalty Marketing
Customer
Customer applies
applies for
for loyalty
loyalty card
card
Measure
Measure Results
Results in
in BW
BW (store,
(store, phone,
phone, internet)
internet)
Measure Submit card

Results application Maintenance
Maintenance of of
Master
Master data
data in
in CRM
CRM
Target
Target groups
groups are
are Execute and
and replication
replication into
into
assigned
assigned to
to Campaigns BW
BW
campaigns
campaigns inin CRM
CRM Maintain (Application
(Application
and
and executed
executed Customer template
template with
with
Master Data customer
customer attributes
attributes
delivers basis)
delivers basis)
Segement &
Build target
group Sales at
POS Shopper
Shopper buys
buys at
at POS
POS
Segment
Segment builder
builder accesses
accesses with his/her preliminary
with his/her preliminary
sales
sales data
data and
and creates
creates card
card
target
target groups
groups inin CRM
CRM Identify POS Upload of (usually
(usually aa paper
paper version
version
customer of
of the
the genuine
genuine card
card ))
POS data
To BW
Once
Once customer
customer master
master data
data is
is available
available in
in Upload
Upload of
of POS
POS sales
sales
CRM
CRM system
system ,, matching
matching of
of customers
customers transactions
transactions into
into BW
BW Data
Data
sales
sales transactions
transactions to
to master
master data
data is
is warehouse
warehouse
possible.
possible.
Agenda
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
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 Tag/Transponder

(aka Reader/Scanner)
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
RFID Advantages and Business Benefits
Advantages: Business Benefits:

Uniquely identifies every
Transparency along the
physical object
Supply Chain within
Unsupervised identification
tracking of all objects
Any orientation
No line of sight required Optimized visibility of the
Multiple read goods flow
Anti-collision
Harsh environments Minimizing the human
Read & Write capability resource factor within
Dynamic Information automatically identification
Reuse of all goods movements
Amount of data
RFID increases quality, timeliness and depth of information
RFID Processes in Goods Transport and Delivery
RFID Processes in Warehousing and Frontstore
Agenda
Outlook - Strategic Development

Project Fashion
Product Fit for 2004 / 2005 - Case Study
SAP R/3
SAP R/3 Enterprise
Enterprise 4.70
4.70 Planning, reporting, SAP BW
SAP BW 4.0
4.0
Transactions, controlling, master data
PIPE analytical applications
management POS data POS Inbound
Processing
Store group Engine SEM BPS
definition Level/capacity type
POS analyses
Capacity data Retail planning
OTB Theme
maintenance Fixture Retraction structure
Analyses for
Purchase order ERP
OTB Capacity
Sales info Relevant planning
Markdown data Theme
control Fixture structure
A matrix
Assortment
Allocation table Planned articles, OTB, listing planning
Allocation strategy information Planned
article
Extraction
Analyses for F&R
Markdown matrix Actual/
Articles, merchandise Relevant application plan data
Master data,
Add- categories, SGs, transactions data A matrix (multidim)
ons assortments, promos,
conditions, theme
structure, fixtures, Exceptions Transaction data
article list
Master data
Master data Allocation proposals
Order proposals
SAP SCM
SAP SCM 4.0
4.0 SAP CRM
SAP CRM >> 4.0
4.0
SCEM F&R Engine Campaigns,
replenishment
promotion planning
process
Primarily Requirements
Dr
aft
Ve
Master
Master data Purchasing rsi
data Purchasing on
Article
Article maintenance
maintenance and
and selection
selection on
on Order
Order entry
entry (fast
(fast order
order entry)
entry)
characteristic
characteristic level
level Delivery
Delivery period
period (tracking)
(tracking)
Article
Article work
work list
list for
for all
all processes
processes
Prepacks
Prepacks
Bestseller-/Slow
Bestseller-/Slow seller
seller management
management
Handling
Handling of
of approx.
approx. 6.5
6.5 million
million skus
skus
Mark-down
Mark-down management
management
Handling
Handling of
of 200
200 Department
Department Stores
Stores
Handling
Handling of
of more
more than
than 20.000
20.000 departments
departments
Allocation
Allocation
Flexible
Flexible and
and short
short dated
dated allocation
allocation
Planning
Planning &
& Analysis
Analysis
Assortment
Assortment planning
planning
Invoice
Invoice verification
verification
Rack
Rack and
and shelf
shelf planning
planning
Mass
Mass maintenance
maintenance
Closed
Closed loop
loop
Payment
Payment before
before shipment
shipment
Analysis
Analysis and
and reporting
reporting
OTB
OTB
Vendor-Management
Vendor-Management
Replenishment
Replenishment Vendor
Vendor score
score card
card
Never-out-of-stock
Never-out-of-stock (NOS)
(NOS)
Integration
Integration of
of events
events
Capacity
Capacity check
check (on
(on shelf
shelf level)
level)
End-of-season
End-of-season monitoring
monitoring
Processes and challenges for SAP
Dr
aft
Ve
Top-Down Planning Subsequent settlement rsi
on
order Splitting / Open-To-Buy Vendor management
(OTB) Planning
vendor sanctioning
Assortment Planning
vendor evaluation
fashion
Master data
basics
article hierarchy
theme structure
store concept
store grouping
article list
capacity planning
substitute & replacement styles
assortment planning
Allocation
Order Generation
pre-allocation (long term view)
fast-order entry
new-allocation (near goods receipt)
simplified Master Data
Maintenance Auto replenishment (NOS)
OTB generation Best / Slow seller management
order controlling (tracking) 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 non SAP non SAP

Object Layer ... Enterprise System System
Service Layer
Provisioning Layer cMDM cMDM cMDM cMDM

Adapter Adapter Adapter Adapter
Content Integrator Exchange Infrastructure
Outlook - MDM for Retail development topics
Data Model Preparation
Ramp up is planned in
Ensuring of Retail Data Model. Protection of a future Retail project.
1.
Scope for MDM 3.1
August 2005
Single Article/ SKU
2. Central maintenance and single distribution
Generic Article/SKU, Set Lot Display

Central Maintenance and distribution
3.
Col. Scenarios, Duplicate check

4. Central Maintenance and distribution
Retail Sites, Organizational depended MD

Purchasing/ Customer Info record

Assortment, Listing
o u
Y
nk
ha
T SAP for Retail
SAP Runs Real Time Retailing
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 SAP NetWeaver mySAP
Enterprise Portal
SAP NetWeaver (Technology): (SAP Service Marketplace)
http://service.sap.com/netweaver or
http://help.sap.com SAP NetWeaver
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
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
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
Momentum
SAP and Karstadt / Quelle AG
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.
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
Copyright 2004 SAP AG. All Rights Reserved
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SAP for Retail

SAP Runs Real Time Retailing

SAP Retail Customer

Best Practices in Retail

SAP R/3 Enterprise for Retail

Evolution SAP for Retail

Future Store Initiative

Outlook SDP Fashion

SAP Retail Customer

Retail Customers Worldwide 1.696 (1367)

M C13 Customers Installations Live Install. Systems

Merchandise Management Customers**369 (269)

Grocery Health & Beauty

Postal Services/ Telco

Fashion General Merchandiser

Catalogue Mail Order/ Internet Selling

Misc. Speciality Misc. Speciality

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

Live with SAP Enterprise 4.7 Live with mySAP Retail

Upgrade to R/3 Enterprise

Upgrade to SAP R/3 4.6C

Live in 800 pilot stores (out of 15.000

Moebel Pfister and Migros Aare upgrade to R/3 Enterprise

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

SPAR Management AG, Switzerland

Best Practices in Retail

e.g. supplying wholesale,

Identification and anticipation of reusable business

mySAP ERP is the successor ERP offering to

SAP R/3 Enterprise

mySAP ERP 2004

mySAP ERP 2005

General statement of direction

mySAP ERP Edition 2004

SAP R/3 Enterprise SAP R/3 Enterprise Strategic Enterprise Management

SAP Enterprise SAP ECC Extension Set

Composite Application Framework

Life Cycle Mgmt

Life Cycle Mgmt

PROCESS INTEGRATION PROCESS INTEGRATION

APPLICATION PLATFORM APPLICATION PLATFORM

mySAP ERP Edition 2004

SAP ERP Central Component 5.0

SAP ECC Core 5.0

mySAP ERP Edition 2003

SAP R/3 Enterprise

SAP R/3 4.6C

2002 2003 2004 2005 2006 2007 2008 2009

SAP R/3 Enterprise

With SAP R/3 Enterprise, SAP R/3 Enterprise Tuned Core,

SAP ERP Central Component 5.0

Optional new Ongoing consolidation of

Traditional functionality as Optional enhancements

SAP ERP Central Component makes use of SAP NetWeaver capabilities

* SAP BW 3.5 can be optionally deployed within the same instance

SAP R/3 Enterprise in Retail

Subgroups e.g. Companion Sales

Direct marketing Promotion Planning