SAP is-Retail Overview v3.0

8/20/2019 SAP is-Retail Overview v3.0

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An Overview of SAP IS-Retail

James Cull

6th March 2015



2Copyright © Capgemini 2015. All Rights Reserved

SAP IS-Retail Overview | 6th March 2015

Topics to be covered…

• Organisational Structures• Articles in IS-Retail

• Merchandise CategoryHierarchy

• Article Hierarchy

• Assortments• Promotions

• Pricing in Retail

• Allocation Tables

• Store Connection (POS)





A few housekeeping rules…

• Please feel free to ask questions at any time during the presentation(remember to unmute yourself!)

• Field names and key terms in SAP are in italics.

• No SAP transactions or technical jargon will be used during thispresentation.

• In fact, I won’t even go into SAP at all. • This session is meant as an overview.

• The topics covered in this session only scratch the surface of IS-Retail, and should(hopefully) prepare you for further, more advanced training courses.

• All feedback is greatly appreciated!



Introduction to IS-Retail


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SAP IS-Retail is an industry solution…

FMS

IS-Retail

MM SD

FICO


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A key fundamental difference in IS-R is the use ofarticles and sites…

• IS-Retail revolves around the article (or material in standard SAP), whichhave a number of special characteristics.

• Instead of plants in standard SAP, IS-Retail has sites – these sites can bedivided into 2 different site categories:

• Store

• Distribution centre

• Most core IS-Retail functionality is based around the retail value chain:

Vendor Planning Merchandising PurchasingMerchandise

Distribution

Sales Customer

Plan Buy Move Sell Report



Organisational Structure


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Organisational structure is a key SAP concept…

• The organisational structure is used in SAP to map out an company’sstructure.

• This can be from a legal point of view (e.g. different legal entities) orsimply from an internal organisational point of view (e.g. Purchasing,Sales, Merchandising and so on).

• We will map out a simple organisational structure for our business, OasisHolding Group, a food and grocery retailer with subsidiaries in both theUK and Germany.




The client sits at the top of the tree…

• A client in SAP sits right at the top of the organisational structure. This isroughly equal to a corporate group. A client can be divided intosubsidiaries, which we do on the next few slides.

ClientOasis

Holding

Group




Underneath the client sits the company code…

• A company code is an independent organisational unit that balancesaccounts in accordance with legal requirements (e.g. accountingrequirements for different countries).

• Our business, Oasis Retail plc, has two subsideries, Oasis Retail plcand its German sister, Oase Einzelhandel AG. These would be separatecompany codes sitting under the same client.

CompanyCode

ClientOasis

HoldingGroup

Oasis Retailplc

OaseEinzelhandel

AG





The next level is the site…

• A site (or plant in standardSAP) can either be a store,distribution centre or afranchisee.

• Sites can either be storesor distribution centres in

IS-Retail (unlike standardSAP).

• A store is usually assignedto a distribution centre, ashighlighted in the example

to the left. Site (Store)

Site (DC)

Company

Code

ClientOasis

HoldingGroup

Oasis Retailplc

London DC

Oxford

Street Store

OaseEinzelhandel

AG

Berlin DC

Unter den

Linden Store

HamburgDC

Sites are part of master data in IS-Retail (unlike standard SAP!)





Underneath the site sits the storage location…

• A storage location formspart of warehousemanagement (WM), andallows a site to be furthersub-divided into smallerareas.

• For a distribution centre,this could be goods in andgoods out .

• Stores are often notsubject to warehouse

management, unless theyhave a clearly defined stockmovement process (e.g. Argos).

StorageLocation

Site (DC)

CompanyCode

ClientOasis

HoldingGroup

Oasis Retailplc

London DC

Goods In Goods Out

OaseEinzelhandel

AG

Berlin DC

For p rchasing the organisational str ct re is





For purchasing, the organisational structure issimilar…

• A purchasing organisation procures merchandise for a business. In theretail world, there would typically be just one purchasing organisation thatbuys for the whole group, but there may also be country-specific ones.

Oasis HoldingGroup

Oasis Retailplc

London DC

UK Purchasing

OaseEinzelhandel

AG

Berlin DC

Einkauf DE

Purchasing prices (or vendor prices) are typically maintained at the purchasing

organisation level.

For sales and distribution the organisational





For sales and distribution, the organisationalstructure is again similar…

• A distribution chain consists of sales organisations and distributionchannels

• A sales organisation is legally responsible for sales in your company andis liable for all products stocked.

• A distribution channel describes the product’s route to market (e.g. retail,wholesale, internet and so on).

Salesorganisation Retail distributionchannel Internet distributionchannel Distributionchain

There is typically one sales organisation per country in retail, with a 1:1 relationship

with the company code.

An example of a sales and distribution





An example of a sales and distributionorganisational structure…

Distribution

Channel

SalesOrganisation

Client Oasis HoldingGroup

Oasis Retailplc

Small Stores Supermarkets Hypermarkets Online



Articles in IS Retail have a number of unique





Articles in IS-Retail have a number of uniquecharacteristics…

• Article data is large and complex, and many fields are the same for allarticles.

• Articles are typically generically across a large number of sites, thereforethe concept of a reference article exists in IS-Retail.

• This allows fast maintenance of article data.

• Deliveries from vendors are often shipped to distribution centres first,rather than to stores.

• Articles are being sold to many customers, therefore POS data isessential.

• The article master transaction combines many different views under onesingle transaction, e.g. listing, sales conditions, purchasing conditions,

POS data, layouts and so on.

• Classification of articles into merchandise categories is extremelyimportant.

Retail systems often has to cope with large amounts





Retail systems often has to cope with large amountsof data…

• Retailers often stock a wide range of products in a large number of stores.• Tesco stocks around 30,000 items across its 3,461 stores up and down the UK.

• If every store stocked the same range of products, this would create 103,830,000individual article/site combinations in SAP!

• Retail systems therefore have to cope with large amounts of data.

• The article and how it is maintained is therefore crucial to any IS-Retailsystem.

There are lots of different categories of article in IS-





There are lots of different categories of article in IS-Retail…

• IS-Retail supports a greater range of article categories than standard SAP• Single article

• Generic article and variants

• Sales Set

• Prepack

• Display

• These all form part of the article master – every article in SAP has its ownmaster record , which holds all the required data about the article inquestion.

• In the article master transaction, this information is divided up into differenttabs.

• Examples include Basic Data, Listing, Purchasing, Sales, Logistics and so on.

Every article has an article master record in SAP





Basic data

Description, units of

measure, weights,

EAN

Every article has an article master record in SAPRetail…

Sales dataDistribution channels,

sales prices, retail

margin

Purchasing data

Vendors, purchasing prices, freight costs,

order currency,

tolerances

Additional data Article descriptions in

different languages,

additional GTINs

POS data

Receipt texts

Logistics data

Stocks, planning,forecasting,

replenishment

Article master record

A single article is an article that is handled





A single article is an article that is handledindividually…

• A single article is an article that is handled individually, in individualpackaging or in specific units of weight.

Single articles can not be turned into other types of article (e.g. gener ic art ic les )

Reference handling for single articles is done as





Reference handling for single articles is done asfollows…

Merchandisecategory

reference article

Explicit referencearticle

gives reference data for

New article

creation

Reference site

Dependent site

copied

down

Generic articles serve as “reference articles” to





Generic articles serve as reference articles tospeed up article creation…

• Retailers often stock a number of standard products with slight variations.• An example could be socks, which can come in a number of different patterns, sizes andcolours.

• To speed up article creation, a generic article can be created.

• The generic article only exists in the system, and not physically.

• In the example above, a generic article for “socks” could be created.

• Different sizes and colours can be created as variant articles of thegeneric article, and all relevant article data is copied down to the variantarticle.

• See next slide for an example.

Generic articles are very common in fashion and less so in grocery and DIY.

A l f i d i t ti l





An example of generic and variant articles…

Generic Article

Socks

Variant Article

Blue socks S

Variant Article

Blue socks M

Variant Article

Blue socks L

Variant Article

Green socks S

Each variant in SAP has its own article master record!

Reference handling for generic articles is done in a





Reference handling for generic articles is done in anumber of ways…

Merchandisecategory

reference article

Explicit referencearticle

Generic article

(socks )

Variant article

(blue sock s )

gives reference data for

Any changes are copied

down

e.g. size, colour

A sales set is a group of single or variant articles





g p gsold as one item…

• A sales set is a group of either single articles or one or more variants of ageneric article sold as a separate article.

• Sales sets are often handled in two different ways:

Sales Sets

• Components are packaged

together and can often be sold

individually as well.

• Examples include:

• A shirt with a matching tie.

• A men’s grooming set

Price Sets

• Formed only by the assignment of

a joint sales price. This price is

normally lower than the total sales

price of the individual components

(which can be sold individually).

• Components are not packaged

together.• Examples include:

• 3-piece suit

• A set of three suitcases in a set

A prepack consists of a number of variants of





p pgeneric articles purchased as one item…

• A prepack consists of a number of variants of one or more generic articlesthat is purchased as a single article.

• The prepack has its own article number, purchase price and priceconditions.

• Prepacks are often used in the apparel industry.

Men’s sockspack L

Red socks

L

Blue socks

L

Black

socks L

Men’s sockspack M

Red socks

M

Blue socks

M

Black

socks M

The two different sizes of socks would be sold (and purchased) as a single article in a

prepack.

A display article is a group of single articles or





p y g p gvariants articles that can be purchased individually...

• A display article is a group of single articles or variant articles that caneither be purchased as individual articles or as a display.

• In the wholesale trade (e.g. in a cash and carry warehouse), displays arebought and sold. In the retail trade, only the individual components aresold.

To summarise all the different article types





To summarise all the different article types…

Article Category Description Example

Single Articles which are handled individually

in individual packaging.

A 250g packet of biscuits.

A 300ml can of deodorant.

A 5 kg box of laundry detergent.

Generic & Variant Articles which come in different

shapes, sizes or variations.

A 300 g pot of yoghurt in different

flavours.

A man’s suit jacket in different sizes

and colours.

Sales set A group of single or variant articles

that can be sold as separate articles.

A shirt and tie set.

A bottle of wine with a matching glass.

Prepack A number of variants of generic

articles purchased as one item

(articles cannot be sold separately).

A 5-pack of mens’ socks in different

colours.

A 3-pack of women’s T-shirts.

Display A group of single or variant articles

purchased either as individual articles

or as a whole).

A box of 48 assorted chocolate bars.



Merchandise Category Hierarchy

The merchandise category hierarchy is a way of





g y y yclassifying articles in SAP Retail…

• A merchandise category is a method of classifying articles in SAP Retailinto different categories.

• It is mandatory for all article types and a 1:1 relationship exists betweenarticles and merchandise categories.

• An article can only be assigned to one merchandise category.

• A merchandise category reference article exists for each merchandisecategory.• This can be used a reference when creating articles.

• Any article characteristics saved at the merchandise category reference article level areautomatically copied down when creating a new article in that merchandise category.

• A merchandise category value-only article means that you can define each

merchandise category on a value basis, as well as on a value basis.• Example: when a merchandise category article is entered at the cash register, sales of

articles in that merchandise category are calculated on a value basis (how much?), aswell as on a quantity basis (how many?)

The various types of articles in the merchandise





category fit together as follows…

Merchandise

category

M e r c h a n d i s e c a t e g o r y h i e r a r c h y

M e r c h a n d i s e

c a t e g o r y h i e r a r c h y

l e v e l s

Merchandise category

hierarchy value-only

articles


value-only articles


reference articles

An example of a merchandise category hierarchy





An example of a merchandise category hierarchy…

Perishables

Dairy products

Cream

Milk

Butter

Meat

Chicken

Pork

Lamb

Perishablesreference article



Article Hierarchy

The article hierarchy is another way of classifyingti l i SAP R t il





articles in SAP Retail…

• The article hierarchy allows you to group articles in a more customer-oriented structure.

• Its use is optional and can either be client-wide or specific to a particulardistribution channel.

• Example: one hierarchy for the retail distribution channel and a different article hierarchyfor the online distribution channel.

• The article hierarchy is used in assortment planning and for procurement.• There is no limit to the number of levels in an article hierarchy, though a

maximum of 10 is recommended.

• The article hierarchy is useful for outbound interfaces (e.g. to POSsystems) and is critical for web sales.

Unlike the merchandise category hierarchy, a 1:n relationship exists for the article

hierarchy - one article can be assigned to several article hierarchies

An example of an article hierarchy…





An example of an article hierarchy…

Article

Product Group

Sub-segment

Segment

Sub-category

CategoryOral

Hygiene

Toothbrush Toothpaste

Cosmetic Therapeutic

CompleteProtection

Sensitive

Dispenser

SparkingWhite

Toothpaste

Tube

SparklingWhite

Toothpaste



Site Master

As we saw on the organisational structure, there aretwo types of sites in SAP Retail





two types of sites in SAP Retail…

Site (Store)

Site (DC)

Company Code

Client OasisHoldingGroup

Oasis Retailplc

London DC

OxfordStreet Store

OaseEinzelhandel

AG

Berlin DC

Unter denLinden Store

Hamburg DC

Sites have a number of different characteristics…





• A site is an organisational unit that is used to map merchandise storedeither in distribution centres or stores for inventory management.

• Each site belongs to a company code.

• Two types of sites are used:

• A distribution centre stores and prepares merchandise for other sites or customers.

• A store presents merchandise and sells it to consumers.

• Internally, a distribution centre is classed a vendor , as it provides othersites with merchandise.

• Stores that receive this merchandise from distribution centres are knownas customers.

Sites are classed as master data in IS-Retail, which contains both vendor and customer

data. This allows the site to be able to send and receive stock to and from other sites.

In retail, goods are often delivered first to adistribution centre then shipped to stores





distribution centre, then shipped to stores…

Distribution centre

Vendor

Store

Customer

Internal

customer

Internal

vendor

External

vendor

External

customer

Internal

customer

Stock transfers within a company code are knownas intra company stock transfers





as intra-company stock transfers

• Stock transfers within a company code are performed using stocktransport orders.

• The DC (vendor) “sells” the goods to the store (customer).

• No invoice is created.

Merchandise issue Merchandise receipt

Company Code

Distribution centre Store

Stock transport

order

Stock transfers across different company codes areknown as cross company stock transfers





• Stock transfers across company codes are performed using stocktransport orders.

• The DC (vendor) “sells” the goods to the store (customer).

• An invoice is created to the store for the price of the goods.

Merchandise receipt

Company Code (DE)

known as cross-company stock transfers

Merchandise issue

Company Code (UK)

Distribution centre Store

Stock transport

order

SAP Retail also supports the concept of departmentstores and shops





stores and shops…

• A department store contains a number of shops that operateindependently.

• In this case, inventory management, planning and reporting is performedon the shop level.

• Merchandise categories and article hierarchies can also be implementedon the shop level.

Shop(Store Category 2)

Department Store

(Store Category 1)Selfridges

Burberry Ted Baker Samsonite MontBlanc

Like articles, sites have master records in SAPRetail





General data

Address, bank details,

unloading points,

contact person

Retail…

Vendor master record

Company code data

Accounting info,

payment transactions,

correspondence, tax

Purchasingorganisation data

Purchasing data,

partner functions

Every distribution centre has a vendor master record in SAP Retail

Like articles, sites have master records in SAPRetail





General data

Address, bank details,

unloading points,

contact person

Retail…

Customer master record

Company code data

Accounting info,

payment transactions,

insurance

Sales area dataOrders, shipping,

billing documents,

partner functions

Every store has a customer master record in SAP Retail



Assortments and Listing

An assortment is a collection of articles with aspecified validity period





specified validity period…

• There are two types of assortments in IS-Retail, local and general .

• Articles are listed in an assortment for a particular validity period, and theassortment defines what is stocked in a particular store.

• General assortments can be assigned to any number of stores, and astore can contain multiple general assortments.

• Local assortments are automatically created and assigned to that site

when a new site is set up in IS-Retail.

• Most retailers use general assortments – this is SAP best practice.

Assortment modules and assortment grades definethe type of products stocked in each store…





the type of products stocked in each store…

Full Range

Special Range

Extended Range

Basic Range

• Food

• Clothes• Books

• Computers

• Food

• Clothes

• Books

• Food

• Clothes

• Food

Assortment Grade Example Assortment Modules

Assortments can be divided into local assortmentsand general assortments…





and general assortments…

Store AssortmentLocal assortment

Category: Store

Distribution centre AssortmentLocal assortment

Category: Distribution centre

Store, distribution centre,

customer Assortment

General assortment

Category: General

Listing is the process of adding an article to a storeassortment…





• If an article is listed in a store, it means that it can be purchased in that

particular store.

• When listing, the validity period can be defined for that particular article.

• For example, an article can be listed for a short time period (e.g. for a promotion), or itcan be listed permanently.

• If an article is not listed in a store, but needs to be used temporarily, then it

can be subsequently listed . This process automatically lists the article for avery short time period.

• For example, a customer returns a product to a store that normally doesn’t stock thatparticular product (i.e. it is not listed in that store). The return must be processed via SAPin that store. The returned product would be subsequently listed by SAP so that thecustomer’s refund can be processed.

Listing procedures determines whether an article willbe listed for that store…





• Articles can be listed by the following procedures:

• By store and by merchandise category (e.g. list all products that belong to themerchandise category Menswear ).

• By store, by merchandise category and by assortment grade (e.g. list all products in themerchandise category Dairy products that belong to the Core assortment range).

• By store layout.

• By article classification (e.g. list all luxury products in the New Bond Street store).

• List all articles.

• Never list articles (e.g. for closed stores).

• The assortment list provides an overview of all the articles that are listed inthat particular store.

• Any modifications to the assortment (e.g. new or discontinued articles,

price changes or promotional articles) are automatically flagged.

Listing is performed using a number of inputs…





Listing Inputs

Article master record

Mass listing

Layout Workbench

Allocation table

Promotions

Article Listing

Listing conditions

Assortment

POS Inbound

Discontinuing articles can be done for a number ofreasons…





Article is no longer

required

End of a particular

season

No longer

manufactured

No longer delivered

from vendor

• Deleting the listing conditions for an article means that an article is nolonger assigned to an assortment . No more orders to a store can beplaced for that article (though the article can still be sold in stores).

• This is temporary, and the article can be listed again if it is to be sold.

• Discontinuing an article means that the article master record is deleted

from the system along with all the article data that belongs to it, includinglisting conditions.

• This is permanent, and the article has to be created again if it is to be sold.



Promotions

The flow starts with creating a promotion usingeither a promotion type or a reference promotion…





Createpromotion

Enterpromotion

data

Enter planningdata

Assign sitegroups

Additionalassignments

Subsequentprocessing

Promotion type Reference

promotion

Promotion type

Planned currency

Promotion period

Quantity planning

Price planning

Period-based

Promotion specificFrom classification system

Discounts

Bonus buys

Listing

Allocation tables

Price activation

An example of a promotion across two differentstore groups…





Validity period for purchasing conditions

Listing period for Birmingham store group

Time

Listing period for London store group

Back to school promotion

Sales period for London store group

Sales period for Birmingham store group

London store groupBirmingham store group



Pricing in Retail

A one-step price calculation is used when sites aresupplied directly from vendors…





Vendor

Store Store

£31.00 £31.00

One-step price

calculation

£49.99 £54.99Sales price

Purchasing price

A two-step price calculation is used when sites aresupplied by distribution centres…





Vendor

Store Store

Two-step price

calculation

£59.99 £54.99Sales price

Distribution centre

£31.00

£45.15 £43.00 Transfer price

Purchasing price



Promotions can be determined in a similar way…





Promotion Promotion priceArticle

Article Sales price Markdown Reduced salesprice

Information about prices and discounts are stored in pricing condition records…





Pricing condition record

Pricing

Price list, article price,

site-specific prices

Discounts/Promotions

Site-specific, article-

specific, price group,

article price group,merchandise categories

Freight data

Shipping costs

Tax data

Sales tax (VAT),

import/export tax

The final sales price is created as a pricing document.

Prices can be set at a number of differentorganisational levels…





PricingConditions

DistributionChannel

SalesOrganisation

Client Oasis HoldingGroup

Oasis Retailplc

Small Stores

PriceCondition A

Supermarkets

PriceCondition B

Hypermarkets

PriceCondition C

Online

PriceCondition D

Prices can be set at a number of differentorganisational levels…





Pricing Conditions

Site (Store)

Site (DC)

Company Code

ClientOasis Holding

Group

Oasis Retailplc

London DC

Oxford StreetStore

PricingCondition A

Stratford Store

PricingCondition B

OaseEinzelhandel

AG

Berlin DC

Unter denLinden Store

PricingCondition C

AlexanderplatzStore

PricingCondition D

The sequence in which pricing conditions areapplied is called the access sequence…





Purchasing price

Markup

Rounding

Final sales price

£21.00

+ 40%

+ £0.59

£29.99



Allocation Table

An allocation table is used to plan, control andmonitor supplies to stores…





Promotion

Planned quantity: 800 pcs

Allocation Table

Follow-on documents

Site group

400 pcs to Store A 300 pcs to Store B 100 pcs to Store C

STO Vendor order Outbound delivery Sales order

Allocation tables contain a number of differentelements that help with planning and controlling…





• Allocation is a push strategy , unlike replenishment, which is a pull

strategy .• Allocation is often used to “push” stock to stores.

• The allocation rule defines how planned quantities are split across sites.

• These can either be manually created or generated using planning or statistical data fromother SAP systems (e.g. SAP F&R/BW).

• Each line in the allocation table is known as an item, and containsinformation such as the article number, planned quantity and the allocationrule.

• A site group is assigned to each allocation table item. This defines(amongst another things) the share of the total planned quantity per site.

• The item category defines the kind of follow-on documents that aregenerated, and this influences the merchandise flow.

• Over the next few slides, we will look at examples of different merchandise flows.



The vendor sends the goods directly to the store...





Distribution centre

Vendor

Store

Direct delivery order



The distribution centre places a purchase order withthe vendor…





Distribution centre

Vendor

StoreStock transport order for stores

Standard PO with

vendor

The items are procured through a combination ofcross-docking and flow-through…





Distribution centre

Vendor

Store

Order placed via the distribution

centre with merchandise

distribution

Goods

transferred

straight from GRto GI

Cross-docking is a quicker way of getting goodsthrough the distribution centre…





Goods Receipt

Cross-docking

Cross-docking and flow-through mean the goods are never put away in storage, so they

can be booked out for deliveries almost immediately.

Goods Issue

A combination of an order via the distribution centre,a third-party delivery and stock reduction…





Distribution centre

Vendor

Store

Third-party deliveryOrder via distribution

centre for the customer

Stock reduction



Store Connection (POS)

A POS system helps post each transaction in thestore to the SAP system…





SAP Retail

• The POS system enters the article quantity, its EAN and its sales price

after each transaction.• It also forwards the method of payment, the amount due in the transaction

and any returns by customers to the store to SAP.

• All data is stored in a special log.

Store POS

system

Middleware

(SAP PI)

POS InterfacePOS

ServerPOS-DM (on

BW or CAR)

POS outbound processing supplies the POSsystems with data from SAP…





Price changesArticle data

Middleware (SAP PI)

Promotions

POS Interface

Store POS system Store POS system

SAP Retail

POS inbound processing supplies SAP with datafrom the POS systems…

SAP





StocksSales figures Returns

Middleware (SAP PI)POS Interface

(inbound)

POS Server

SAP



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SAP is-Retail Overview v3.0

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