Sap retail merchandising and assortment planning overview 2

1Merchandise and Assortment Planning (SAP MAP) Overview Part II

2 SAP 2008 / Page 2

1. Introduction2. Strategic Planning3. Store Planning4. Merchandise Planning5. Capacity Planning6. eSOA services for integration SAP MAP to SOP

(Shelf Optimization Program)7. Assortment Definition8. Assortment Planning9. eSOA services for integration SAP MAP to SAP ERP10. Release Workbench

Agenda

3 SAP 2008 / Page 3

Strategic Plan

Store Plan

Merch. Plan

Execution

Assortment Definition

Capacity Plan

Assortment Plan


Master Data Object Assortment: Creation in SAP MAP: Available in SAP ERP

and SAP BI

Alternatively creation in SAP ERP and extraction to SAP MAP (depends on your business needs)

Function: Application for assortment definition in BI (BW-

BPS and BI-IP)

Usage of assortments (store groups) also in following applications: allocation, promotion

Main Objectives / Challenges:

Simplify accurate store grouping/ clustering many variables are involved in accurately

clustering therefore retailer cannot manage this process manually

Group stores that can be considered/ plannedtogether in order to streamline the planning and merchandising process

Determine which store cluster receives whichproduct mix for which time period

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SAP Assortment

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Enhancements for SAP Assortment

Assortment type

The assortment type is an assortment attribute enables the strategicalignment of the assortment and its treatment in assortment definition, assortment planning and procurement to be controlled

Assortment dimension For each assortment type up to 3 dimensionens Characteristic values per dimension Example: Assortment type Business type dimensions Capacity

level (Values 1-9) and Price level (Values 1-3)

Example Clustering according to Capacity and Price level Clustering according to climatuc zones Clustering according to delivery regions

6 SAP 2008 / Page 6

Assortment Definition - Example

Calculatingprice level

Calculatingprice level

What price level is a store assigned to for a specific merchandise area?

Calculating capacity levelCalculating capacity levelHow many fixtures does a store have for a specific merchandise area?

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2

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987654321

Capacity level

Pric

e Le

vel

Assortment DefinitionAssortment DefinitionStores with the same price level and capacity level are assigned to the same group to ensure a degree of standardization (common planning and use in operative processes). They are mapped onto the SAP assortment.

Increasedcapacity

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Levelold/new

Cap.old/new

Store 1

Store 2

Store 3

Store 4

Store 5

Store

Hierarchy nodes: Ladies blousesKey date: Today

Calculate values

Assortment 3,1: Ladies blouses, High level, low capacity

Level dimension = 3Capacity dimension = 1

Assortment 3,3: Ladies blouses, High level, high capacity

Level dimension = 3Capacity dimension = 3

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3

Determine assortmt


Valid from

Valid to

Assortment

3,1

2,1

3,1

3,3

2,1

Store 1 11.15.03 02.01.05Store 3 11.01.03 02.01.05...

Store 4 11.01.03 02.01.05...

Save

SAP BI

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11.15.0311.01.03

11.01.03

11.01.03

11.01.03

02.01.0502.01.05

02.01.05

02.01.05

02.01.05

2,2

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time-dependent assignment of stores to assortments according to their dimension values for tier and sales level

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Agenda

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What is Assortment Planning ?

Assortment planning is a part of the bottom-up planning process. An assortment plan is defined as a unit plan, which defines a key mix of goods, at a point and time. It establishes the breath and depth of the product assortment in a set of store groups (or clusters). It is a living, breathing plan that becomes more refined as the decision making process of product development / product selection is finalized.

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Strategic Plan

Store Plan

Merch. Plan

Execution


Capacity Plan

Assortment Plan

Assortment Plan

Period month / season / rollout Sales organization/ distribution

channel Segment / assortment Product / variants (color, size)

Planning level

Sales Gross margin Sales and purchase prices Stocks Number of products

Key figures Define the right product for the right

stores / assortments Offerings are tied to customer

behavioral patterns Create new products, add existing

products, remove a product, Simulation of planned products

Assign products to assortments Planning of assortments

Markdown Planning

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Assortment Planning Fashion

Within SAP you have the following options to carry out the "creative" assortment planning process:

OPTION 1:You can complete assortment planning within SAP BI as soon as key figure target planning is finalized. These targets are transferred to SAP ERP. There you can carry out the operational part of assortment planning using the OAPC (Operational Assortment Planning and Control)

OPTION 2:Or you carry out some or even all process steps of operational assortment planning within Integrated Planning of SAP BI and transfer this information to SAP ERP (OAPC) for fulfillment. The process steps are:

Determining the correct product mix for the assortment Creating new planned articles Selecting colors and sizes for an article Planning quantities (this can be done down to the level of the article/color/size) Enter packsize / quota scale

The following slides show just one possible process variant for fashionmerchandise assortment planning:

Due to the characteristics of fashion merchandise, the planning aspect is much more important for assortment creation than for other types of merchandise. Where fashion merchandise is involved, assortment planning is much more dependent on creativity, the analysis of fashion trends, and the ability to modify existing plans as quickly as possible. The focus with respect to materials/fabrics, colors, styles and so on must be determined and adjusted to the target groups. It forms the basis for the article shells (planned articles) and their attributes, which will be planned subsequently.

It is often the case that the specific articles do not even exist in the system at the time of planning. Accordingly, assortment planning initially involves ideas or shells of articles, which then take shape progressively through the course of the planning process. An important task of these planned articles is to reserve capacities at a time when the actual articles are not yet known.

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Seasonal Assortment Planning Overview of one Possible Process Variant for Fashion

ERP

Assortment PlanningBI

OperationalAssortment Planning

and Control

Assortment Plan

Purchase Order

Allocation

Master Data

Assortments / Store Assignments


Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix

Prepack/Quota-scale per Color

Size Creation

Style/Size Mix

RelaseWorkbench(retraction of transactional

or masterdata)

Assortment Definition: For each merchandise area (any article hierarchy level), you define assortments and assign the assortments to stores that have identical dimension values. Optionally, this assignment can occur time-dependent. You can calculate these dimension values either in the APD (Analyze Process Designer) or using a custom-defined algorithm that you can implement in a Business Add-In (BAdI). To make the assortment assignments you planned in the BI system available to the operational processes, you have to release them to SAP ECC with the Release Workbench (message type LOCGRP), either manually or in background processing. Target planning for your Assortment Plan: Plan the quantities and values for the initial buy allocation and putaway quantity as the targets for Operational Assortment Planning and Control (OAPC). You plan these targets at the level of the article hierarchy node, assortment type, assortment, season, season year, and rollout. You transfer the targets to OAPC in SAP ECC using the Release Workbench manually or in background processing. There these targets can be drawn on for the further details of your planning.Create planned article: For the correct product mix in your assortment planning, you may require new articles. You create these planned articles (generic articles, styles) by entering some article information. You also define the colors and sizes in which you wish to procure the article. Normally, all planned articles are not included in the final assortment plan. Determination of the correct product mix is usually an iterative process. The information on the article and the actual article planning usually develops during the process of assortment planning. Execute quantity planning: You can plan, for example, at the article level or the article/color level or the article/color/size level. Here you plan the quantities for fixed allocation and reallocation of initial buy and putaway for both the planned and existing articles.Create prepack generation information: You can determine the prepack size and assign a quota scale for the distribution to the sizes.Release to merchandising system (OAPC): The release of the assortment plan can take place at the following levels: article hierarchy node, article, rollout, season year and season category.ResultAt the end of assortment planning, you have assigned stores to your assortments time-dependently for each merchandise area, and released the assortments and assignments to SAP ECC. You have also determined the articles, quantities and prepack information and transferred them to OAPC in SAP ECC.

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Seasonal Assortment Planning Assortment Plan

ERP


Target data for OAPC is planned

Level: Assortment, Rollout, Season, Season Year

Assortment Plan


and Control

Purchase Order

Allocation

Master Data

The following data can be written to the inbound interface and displayed as planning information in OAPC in the standard version:

Key performance indicators Fixed allocation of initial buy and Reallocation of initial buy (on a quantity and value basis: purchase price, sales price) at the following levels:Article hierarchy nodes; assortment type, assortment, season, season year, rollout

Key performance indicator Putaway quantity on a quantity and value basis at the following levels:Article hierarchy nodes; season, season year, rollout, (local distribution center) assortment

Number of different generic articles (or single articles) per key performance indicator in the assortments (assortment width).

The planned quantities of the key performance indicators fixed allocation of initial buyand reallocation for initial buy for the assortments are valid for each store contained in the assortment.

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Assortment Planning Assortment PlanExample Cluster Plan

In this sample template all assortments (clusters) for a given segment, season, season year, rolloutcombination are displayed

Key figures that are needed later on by the OAPC (operational assortment planning and control) areplanned

this sample also provides on overview of the number of stores and the number of options currentlyassigned to an assortment thereby delivering important information as base for planning

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Seasonal Assortment Planning Option Plan

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Assortment planning Option PlanExample Option Plan per Cluster

In this sample template a given assortment can be planned in more detail Products that are already assigned to the assortment are displayed Planner can drill-down to colour level and verify/ change the respective key

figures that have been distributed from assortment plan down to style/ color level Possibility to use quotascale key figure for distribution This sample template incorporates new functionality on BI:

Create Styles, Create Colors, Style/Color Mix, Packsize/Quotascale

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Seasonal Assortment Planning Style Creation

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Style Creation

Styles are placed in the hierarchy Attributes are assigned, e.g.

Pack size Size curve (quota scale) Fashion grade further attributes can freely be added

Possibility to copy an existing style Release status of style (1 = planned, blank =

released)

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Seasonal Assortment Planning Color Creation

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Color Creation

Colors are created and can be grouped with thehelp of an attribute, e.g. colour family

New color can be released into SAP ERP via the purchasing list release

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Seasonal Assortment Planning Style / Color Mix

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Style/Color Mix

Assign new or existing color to a new or existing style Style/ color assignment can be released into SAP

ERP via the purchasing list release

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Seasonal Assortment Planning Prepack/ Quotascale per Color

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Packsize/Quotascale per Color

Add pack size per color Add quota scale per color this information is used to create

prepacks and variants in ERP and distribute quantities to style/ color/ size

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Seasonal Assortment Planning Size Plan

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Size Plan

In this sample template a given assortment can beplanned in more detail

Products that are alreadyassigned to the assortmentare displayed

Planner can drill-down to colour/ size level and verify/ change the respectivekey figures that have beendistributed from assortmentplan down to color/ size level

Possibility to use quotascalekey figure for distribution

This sample templateincorporates new functionalityon BI: Create Size Style/Size Mix

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Seasonal Assortment Planning Size Creation

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Size Creation

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Seasonal Assortment Planning Style/ Size Mix

ERP



and Control

Assortment Plan

Purchase Order

Allocation

Master Data



Option Plan

Size Plan

Style Creation

Color Creation

Style/Color Mix


Size Creation

Style/Size Mix


or masterdata)

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Seasonal Assortment Planning Example Style/Size Mix

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Assortment Planning Process ExampleNon Fashion

Within SAP you have the following options to carry out the basic assortment planning process:

OPTION 1:You can complete assortment planning within SAP BI as soon as key figure target planning is finalized. Transfer the assortments to the layout workbench and complete the operational assortment planning part there.

OPTION 2:Or you carry out some or even all process steps of operational assortment planning within Integrated Planning of SAP BI and transfer this information to the layout workbench of SAP ERP for fulfillment. The process steps are:

Assortment Version Creation Product Creation Assignment of Products to Assortments (Creation of Product Mix)

The following slide show just one possible process variant for basicmerchandise assortment planning:

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Non-seasonal Assortment Planning - Overview

ERP

BI

Layoutworkbench

Purchase Order

Replenishment

Master Data

Assortments /Store Assignments

Operational AssortmentPlanning and Control

Space management

Third party

Assortment Planning

Assortment PlanAssortment Definition

Product Plan

Assortment Creation

Version Creation

Product Creation

Product Mix

Space management

Third party


or masterdata)

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Agenda

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ES Bundle Merchandise and Assortment Planning Integration

Business Value Enables interactive and iterative assortment planning

to be undertaken concurrently with product selection and departmental planning.

Closes the gap between departmental planning, range selection and execution

Reduces the duplication and new product data set up cycle time

Extends the integration between the Merchandise and Assortment Planning module (SAP MAP) and SAP ERP to the style/colour/size level (SKU). This enables the style level assortment planning processes to be completed in SAP MAP and the results sent to the operational assortment planning and control (OAPC functionality within SAP ERP) for subsequent creation of allocations and purchasing lists.

In conjunction with the development of the placeholder style, the functionality gives retail buyers and planners the ability to iteratively assort ranges to store clusters through the planning cycle and only create approved articles in the SAP ERP at the point of approval.

Use Cases Assortment approval triggers the release of master and attribute data

assigned to the articles within the SAP MAP assortment process to SAP ERP for the purpose of creating purchasing lists.

The released data assortment plan contains sufficient data to createprepacks through the OAPC functionality

Purchase list creation respects the delivery dates defined in the approvedassortment plan

Creates/develops product

Selects Product

Designer

Assign productsto clusters

Planner

Releasesassortment

Develops seasonal plans, clusters stores

PlannerBuyer Buyer/Planner

Backend System SAP MAP (BI)

SAP MAP (BI) SAP MAP (BI)SAP MAP (BI) SAP MAP (BI)SAP MAP (BI)

OAPC(aka Seasonal Purchase

Management)

SAP ERPSAP ERP

Planner

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Overview new MAP Integration, EhP3, BI SP9:Service OperationsERP

PurchasingList

InboundProcess

(in OAPC)

Articles

PurchasesOrders

Maintain Retail Purchasing Plan

Create Sales Price Specification Calculation

Create Material Basic Data

Layout Module Version Inbound Process

LayoutWorkbench

BI 7.03 SP 9

Existing

Assortment Plan for Basics

(existing Message AssortmentProductVersion in BI)

Sales Prices Data

Basic Article Data

Purchasing plan

Including planned articles,article information, targetson assortment level,

Service Operations

Create ProductProcurement

Arrangement as Bulk Purchasing Info records

Assortment Plan for Basics

Assortment Plan for Fashion

BI

Request Product Procurement

Arrangement as Bulk

Request Sales PriceSpecification Calculation

Request Material Basic Data

AssortmentProductVersion

Request Retail Purchasing Plan

MAP BI Foundation

Content

Master Data Creation

Planned Articles

MA

P Release W

orkbench

EhP 3

Service Operations:Maintain Retail Purchasing Planvia this service, you are enabled to maintain a Retail Purchasing Plan. Input: Retail Purchasing Plan basic data, list of styles with their attributes, colors, sizes and planned quantities per assortment, target sales per assortmentInbound service in SAP ERP system, Initiated by the release workbench in MAP BI via the service Request Retail Purchasing PlanBO: Retail Purchasing PlanCreate Sales Price Specification Calculation (EhP2)via this service, you are enabled to calculate a sales price.Inbound service in SAP ERP system, Initiated by the release workbench in MAP BI via the service Request Sales Price Specification CalculationBO: Sales Price Specification CalculationCreate Material Basic Datavia this service, you are enabled to create a material (for retail a single article) with its basic data. Input: material basic data such as material number, description, merchandise categoryInbound service in SAP ERP system, Initiated by the release workbench in MAP BI via the service Request Material Basic DataBO: Material

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Create Material Basic Data as Bulk (This Service will only work for standard Material, not retail article)via this service, you are enabled to create materials (for only a standard material) with its

basic data Inbound service, initiated by SAP ERP systemBO: MaterialCreate Product Procurement Arrangement (Not used by the MAP scenario, but part of EhP3 MAP development)via this service, you are enabled to create a purchasing info record Inbound service, initiated by SAP ERP systemBO: Product Procurement Arrangement Create Product Procurement Arrangement as Bulkvia this service, you are enabled to create purchasing info records. Inbound service in SAP ERP system, Initiated by the release workbench in MAP BI via

the service Request Product Procurement Arrangement as BulkBO: Product Procurement ArrangementRequest Retail Purchasing Planvia this service, you are enabled to maintain a Retail Purchasing Plan. Input: Retail

Purchasing Plan basic data, list of styles with their attributes, colors, sizes and planned quantities per assortment, target sales per assortment. This is an outbound service which is called through the MAP release workbench.BO: Assortment PlanRequest Sales Price Specification Calculationvia this service, you are enabled to calculate a sales price. This is an outbound service which will be called through the MAP release workbench.BO: Merchandise and Assortment Planning MaterialRequest Material Basic Datavia this service, you are enabled to create a material (for retail a single article) with its

basic data. Input: material basic data such as material number, description, merchandise categoryThis is an outbound service which will be called through the MAP release workbench.BO: Merchandise and Assortment Planning MaterialRequest Product Procurement Arrangement as Bulkvia this service, you are enabled to create purchasing info records.This is an outbound service which will be called through the MAP release workbench.BO: Merchandise and Assortment Planning Material

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Agenda

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Integration Between BI & Retail System

After a plan or part of a plan containing information for subsequent processes has been finalized, it has to be released by the planner.The information of a plan consists of created master data and plan data.With the release workbench XML messages are created and sent to the XI. For some message types using an RFC or eSOA connection is optional.Then the merchandising system (ERP or any other system) can get the messages and use the information.

XI

BI Merchandising SystemXI

Release transaction

Outbound proxy

Data

BAPIs / Functionmodules

Inbound proxy

Data

After you have drawn up the final version of a plan or sub-plan you can release it. This triggers the creation of outbound messages with relevant data. Data can be distributed as XML files with the SAP Exchange Infrastructure (SAP XI) and for some messages you can choose to send it directly by RFC to the SAP ERP System. In the SAP XI environment, MAP message types MAP are defined under application component http://www.sap.com/platform/netweaver/processintegration.epx.

In the Release Workbench use appropriate selection criteria (for example, product ID, category, sales organization and distribution channel) to specify the exact data that you want to release. You can simultaneously release data for several message types (for example, all message types that relate to a particular category).

To use the functions of the Release Workbench you must have the appropriate authorization:Authorization for specific selection criteriaAuthorization for repeated release of data

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RFC, XI or eSOA

As of BI Content release 7.0.3 SP9 and BI-IP support package 14, the following message can be used:

Sales Reduction BudgetRetail Purchasing plan *Product (New, including sales and purchasing prices) **

Product (Original)OTBMarkdown proposalsLocation Group / Assortment

Assortment version for optimization (New)Assortment version for optimization (Original)Assortment version for merchandising (New)Assortment version for merchandising (Original)Assortment ProductAssortment PlanAllocation / PO

ESOAXIRFCMessage

Following a release, XML files are created that can be distributed with the SAP Process Integration. Alternatively, data for specific message types can be transferred directly with Remote Function Call (RFC) to an SAP ERP Retail System. For more information on RRCenabled message types, see OSS Note 682377.

*RetailPurchasingPlan Message type can also be used by RFC, see note 1152266

**New Product implementation sends three messages: material basic, product procurementarrangement, sales price specification calculation

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General Selection Screen

General selections for all message types

Some message types have dependencies E.g. markdown proposals need the corresponding product

message released first. Use this flag to release the prior messages automatically

In the first step you select which message types you want to release

On the initial screen in the Release Workbench you choose message types using the relevant selection fields.

You can also choose Release Associated Messages.

In the screen area General Selection Criteria you can store general restrictions for the data to be released.

Most message types are based on master data and can only be released once. Other message types, such as OTB, allocations tables and purchase orders are composed of planning data and can be released more than once. The related control is performed with a release status that is available for master data but not for planning data.

To be able to send markdown proposals you do not need to release the proposals manually beforehand. The system creates these at periodic intervals - usually once a week and transfers them to the retailing system.

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Detailed Selection Screen

Delete selection criteria

Simulate the release process.

Release the messagesin dialog

Release messages in a job e.g. periodically every night.

Application log

After you have entered data on the initial screen a tab page is displayed for each selected message type. You then enter additional data there that is specific to the message type.

It is not possible to release data here straight from the planning layout.

Data can be released immediately or it can be scheduled as a job for later. Alternatively you can simulate the release. Checks are performed here without triggering a release.

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Application Log

The history of release actions is logged in the application log.

It helps in case of errors and answers questions like which products have not been released yet?

Every release transaction is retained in an application log that you can call at the touch of a button. This contains information about the selection conditions and resulting data objects and about error messages if the release was not completed successfully.

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Sap retail merchandising and assortment planning overview 2

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